 Private Costs: costs paid for by a business or the consumer of a product.

 Private Benefits: gains to a business or the consumer of a product.

 External Costs: costs paid for by the rest of society, other than the business.
 External Benefits: gains to the rest of society, other than the business.
 Social Costs = External costs + Private costs.
 Social Benefits = External benefits + Private benefits.
 If the social benefit exceeds social costs, the scheme will likely be accepted; the government/local community will
probably refuse permission

 Exchange Rate: the price of one currency in terms of another currency.

 For example, 1 Euro is equivalent to 1.2 Dollars

 Currency Appreciation: when the value of a currency increases. It can buy more of another currency
 1 euro = 1.2 dollars, to 1 euro = 1.5 dollars.

 Currency Depreciation: when the value of a currency decreases. It can buy less of another currency.
 1 euro = 1.2 dollars, to 1 euro = 1 dollar.

 2 things influence the exchange rate of a currency: Demand for the Currency: if many people want to buy the
currency, the price will increase because it is a limited’ number of currencies (so it leads to appreciation).

 Supply of Currency: if the central bank prints more money, the supply increases, but the demand is still the same, so
the value is lower (leading to depreciation).

If it is appreciated, then Import prices fall: since your currency can buy more of the other currency

If its depreciated, then Import prices will rise: Your currency is worth less, so you need more to buy other currencies