Thursday, November 20, 2014
Sam McDonald Chapter 11 Question 6
While reading this chapter I came across yet another economic fact that I previously thought would be different. Previously I thought that if the American dollar grew weaker, then nothing good could come out of it. After reading the section in Naked Economics about the Ford dealer ship I now know differently. It states that when the dollar is weak, businesses which export goods to other countries who's currency is stronger than the dollar will benefit. How so? In the countries with a stronger currency the price for a Ford Taurus will be cheaper for the people buying it, yet Ford will still pull in the same amount of money. Therefore, everyone one wins. This has completely contradicted my previous thoughts about the weakening of our dollar being ruinous to our economy, and now I know that neither a weak or strong currency is "good".
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