•Each dollar gets you more of the other currency.
• this means is that US exports gets more expensive for foreigners.
•US imports gets cheaper for us
•Results: Exports decrease while imports increased
• $ is leaving the US
-Xn and GDP decrease
- Demand for the dollar increases
- Supply of the dollar decreases
Dollar Depreciation:
• Each dollar gets you less of the other currency.
• Less of the foreign currency is needed.
•Exports are going to increase and imports are going to decrease.
•money is entering the US
- Xn increases
- GDP increases
•Demand for the dollar decreases
•Supply of the dollar increase
*if it comes to supply of the dollar, we're making transfered payments to foreigners
*If it comes from supply of the dollar, foreigners are making transfer payments to us.
* Supply of the dollar: comes from US Citizens, banks and industries, wanting to purchase our goods, investments and assets.
No comments:
Post a Comment