The aspects brought up in this chapter are extremely relevant to the current times and news cycles which are commonly including terms such as trade deficits, trade deals, tariffs, and negotiations due to the current President's policies and the history of trade with the United States, with China being the primary trade partner or adversary.
Currency appreciation and depreciation were other terms from this chapter which have current, real-world effects on the economy of the US and abroad. As monetary policy changes, so to can the value of currency. The exchange rate is the rate for which one currency can be exchanged for another, while the real exchange rate is the rate where both currencies purchase the same goods. The real exchange rate is the rate where one can trade goods of one country to another. A $4.00 beer in the states is a $2.00 beer in Mexico. The real exchange is 2 - 1 for the cost of a beer.
A real world example I experienced is when traveling to Cuba in 2016. Cuba has two currencies, one for Cubans and one for tourists. When exchanging dollars to CUC's an exchange rate of one-to-one but a tax on American dollars of 10% is added. This tax does not occur when exchanging Euros or other currencies. My wife and I were very fortunate to see Cuba when we did, we saw The Rolling Stones play, and was in Havana when President Obama was as well.
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