Kramer ends up hosting a group of Japanese tourists, saying, "Manhattan can be quite pricey, even with 50,000 yen." To which Elaine says, "50,000 yen—isn't that only a few hundred dollars?" "Evidently," Kramer replies. This illustrates the nominal exchange rate (50,000 yen for a few hundred dollars) and points to the idea of the real exchange rate (in terms of purchasing power, 50,000 yen doesn't purchase many visiting days in Manhattan).
Jacob and Adriene explain how exchange rates affect the greater macroeconomic climate through imports and exports. They explore what countries do to influence the exchange rate and the implications of exchange rates on consumers.