many times I hear ones country economy growth to be said inceased but when I see their change of currency with dollar is very deflated even less than some developing countries.for example Ethiopia and Japan .please I want to know the relation between economic growth and value of the  country currency.
216099
Typically, smaller economies grow faster than developed economies as measured by GDP per capita.  The exchange rate, or value of their currency is affected by a lot of different factors including debt, barriers to trade, GDP, trade balance, etc.  All else being equal, if per capita GDP increases, the value of the currency should also increase.
324049
The differences between currencies come essentially two factors:\n- the strength of the countries economies\n- the rate of long and short term bonds in the country and the solidity of it´s finances.\n\nInvestors buy currencies not so much to invest in them, but to buy products, stocks and bonds from that country. The American dollar has the added advantage that oil is paid in dollars.
86604
This is a question which requires lengthy answer, here it is not possible.\n\nStock market is the place where companies float their shares for public purchase.\n\nIndividuals from the public visualize the market condition with that of business of a company. If the general guess is for a better prospects, public price of the shairs will go up and if prospects are not good, the public price of shairs will go down.\n\nThe price of currency of a country is fixed with respect to international economic standing of that country. With changes in economic role on international level the currency value changes accordingly.\n\nTo fix price of a currency by a country involves lot of considerations. For example if one country increases its currency value with respect to other countries, cost price of exports will increase and so it will face more competition and so is the reverse. There are many such factors. This is why it is not free will to adjust value of a currency.\n\nGold is a raw material with minimum chances to depreciate. Oil is the biggest raw material now a days. These and few other raw materials directly control the international business and so they affect the value of currency.
509
It mainly develops naturally. The flow of money is the building block of an economy, and people will keep money flowing fairly well on their own as long as there is a basic infrastructure, such as a set market place and day/time. The highly complex economy we have today is mainly the result of these natural developments. Governmental interference can only make a limited amount of difference.
180751
Sudan, Mexico? i don't know, but it's probably not pretty. Actually check the currency exchange and see where the dollor is worth most at.
339762
According to popular thinking a widening in the balance of payments deficit raises the demand and lowers the supply of foreign currency and this leads to depreciation of domestic currency.\n\nThis theory suggests that if local prices are going up, for whatever reasons, this gives rise to more imports and fewer exports i.e. the widening in the balance of payments deficit. In other words if rises in domestic prices exceed rises of prices abroad, other things being equal, this will cause balance of payments deficit and domestic currency depreciation.\n\nThe Austrian School, led by the late economist Ludwig von Mises, however, holds that this cannot be so. As long as the money supply is not expanding peoples monetary income will not increase. Consequently they would be forced to restrict their consumption either of imported or domestic products in response to price rises. In the first case imports will drop and in the second case exports will increase. Thus the balance of payments will be brought to a �favourable� state.\n\nThe Austrian view holds that the exchange rate of a currency like the price of any other good is determined by its relative scarcity in relation to the demand to hold currency. Just like any other good, both supply and demand determine the price, or the exchange rate of a currency. According to Mises the rate between two currencies will tend to equal the ratio of their purchasing power. In other words it is the relative purchasing power that determines the currencies rate of exchange.\n\nFor the mainstream economics the purchasing power of money is the inverse of a price level depicted by a price index. Mises however, showed that the price level and general purchasing power of money cannot be quantified. He showed that the purchasing power of money is an array of specific goods. As an example the purchasing power of one dollar is one kg of potatoes i.e. one dollar buys one kg of potatoes, or half a kg of tomatoes.\n\nIn short the price or purchasing power of one dollar is an array comprising of one kg of potatoes and half kg of tomatoes. However, tomatoes and potatoes are not commensurable. This means that we can only quantify the purchasing power of a dollar with respect to specific goods and not for total goods.\n\nNow, since price level is the inverse of the purchasing power of money it follows then that it cannot be also established. According to Mises various price indices that are employed have nothing to do with price levels and their use leads to erroneous analyses.\n\nFurthermore, mainstream economists fall into the trap of comparing prices of supposedly identical goods in various locations as a proof that the purchasing power of money in the real world differs in different markets at the same time. However, the value of goods is not only determined by their physical appearance but also by their location. Thus a hamburger sold in New York is a different product from a hamburger sold in some remote village in the Sahara desert. For the first is a hamburger in New York while the second is a hamburger in the Sahara desert village.\n\nAccording to Mises as long as the exchange relations exist between two different currency areas, economically the money of one area necessarily functions as the money of the other area, since both moneys must be utilised in effecting an exchange between the two areas. Consequently the purchasing power of currencies is established with regard to a good in the same location.\n\nThus the purchasing power of the German mark and the purchasing power of the US dollar are all established with regard to the same good in the same location. If one loaf of bread in New York is sold for two marks or one dollar then the rate of exchange between the mark and the dollar will be 2:1 (two-to-one). If the rate of exchange differs from this ratio it will set an arbitrage activity until the rate of exchange will adjust towards the ratio of prices.\n\nThus if the exchange rate is 3:1 this mea
157845
A country's central bank controls the currency.  If a country were to just print out more money (too much money) they will end up destabilizing the currency, meaning too much money chasing too few goods.  This will cause high inflation and will then cause more money to be printed and on and on.  Additionally world markets will see what is going on and will take their money out causing more damage to that country.  Just printing out more currency is not the answer, just ask some South American countries, they learned that the hard way.
572012
money and value are relative terms.\neg if we have only 100 $ in the whole world then value will be fixed accordingly.\nnow u keep increasing this amount and value will be adjusting accordingly.\nin theory i must say that we have sufficient money vis-a vis\nthe value.
74848
Currency values between countries aren't controlled by any specific agency or anything, they're resultant of the economic factors in the various countries. A country can't just one day say 'hey, our currency's worth 10 times more than it was yesterday!' - it's a measure of how much money will by in the given countries versus production costs, etc. etc. - it isn't a controlled value.
621468
No! At least on the Depression, the main worry of economists currently is that the growth in the US economy is so substantial that the value of our money is increasing, so the Fed is raising interest rates to hurt the economy and to devalue the dollar so that the dollar doesn't increase in value, which could lead to a small drop in the long term value of the dollar. Which is why we don't need the Fed, who should have to ride in short buses instead of limos.
103369
Fed impacts the economy with monetary policy through raising and lowering interest rates. The discount rate is the rate sets the interest rate for lending- and the government short term and long term bonds. \nRaising rates makes borrowing money more expensive (think of your credit card, or home loan, you want rates low because you'll borrow and spend more)- spending more fuels growth in the economy. \nHowever this needs to be balanced in order to curb inflationary pressures (where prices increase because of demand pull, or cost push). Having too much money sloshing around in the economy can create havoc in the economy because without keeping it in check, too much money will eventually lower the value of that money (think diamonds or something, the rarity creates value). \nThey have raised rates because:\n1. They are showing they are optimistic about the growth of our economy- raising rates signals they think our economy is growing, not slowing.\n2. They are also raising rates because globally, other countries are also raising rates and in order to keep attracting foreign banks/investors to hold our bonds (or debt) we need competitive rates. So if you want more info on what the foreign direct investment means, email me. Seems you're focused domestically.\n\nWhen will they maintain the existing level?\n- it depends on the growth of the economy\n- no one has a crystal ball- but if oil prices continue to increase and the fed doesn't want to lower interest rates, he could keep it steady instead of sending the signal of lowering rates (which would seem like a slowdown in the economy).\n- they will lower it if the expansion of our economy slows significantly- right now we are around 1.8% per quarter (double check- was in Wall Street Journal a couple of days ago). If the quarterly growth of GDP begins a downward spiral, then lowering interest rates will hopefully help reverse that trend (meaning fuel people to borrow and spend).\nHope this helps
135766
A very good question. Here are my thoughta.\n\nFirst the US is running a trade deficit with those countries, which means that they are selling less than they are buying, however with each of these countries, they are taking the extra money they gat and investing in US debt (bond T-notes etc.) So the money flows back into the US and creates demand for their currency. If the US changed their policy, then this influx of money and investment would dry up, creating a situation where the US would have to raise the interest they pay on their government debt, which would slow down the economy, which would put people out of work, which would create more need for US debt, which would mean they would have to raise rates again. And this would become the death spiral that Japan has gone through for the last 10-12 years.\n\nHope this helps.
136853
You've tapped a very complicated subject my friend - I think all of macro economics is vague and all of the smartest economists don't agree on what is going on... So I don't think it is intentionally vague - any more than the rest of the economic field....  Also China owning US debt began when they became part of the WTO (I believe this may have happened on Bush's watch, but was started by Clinton - i.e. not a republican/democrat thing.) I don't know how easy it will be to find - but seems like to answer your specific question you would want to understand the ownership of US treasury securities.  If you are just curious and want to know about this stuff - China does hold a large portion of our debt and that is because we spend more money than we have and they save more money than they make.  We have trade deficit with China because we want to buy their goods, because they are cheap.  In the past they have been more than happy to lend us the money to do so.  But if we don't watch it, our creditors are going to start saying no.  The opinion of congress right now is that this is China's fault and that they are a currency manipulator who should let their currency appreciate.
106825
no, this leads to hyperinflation and the currency becomes worthless. great examples can be found in former east germany, bolivia, etc.
262169
Sorry I didn't see your question sooner.\nThe Mundell-Flemming Model assumes a small open economy.  Specifically, the country being studied can't affect world prices.  Open includes openess to financial flows, as well as goods and services flows.\nOne implication is that no single country can affect the interest rate.  There is world interest rate, r*.
123800
Observe the economic of your country for a while and learn from it.\nOr you could always try www.wikipedia.org
406594
Wow you are a big brave guy.  You write jabs at people and end your question before anyone can respond to it.  \n\nI guess the micro pen joke is actually not a joke at all.  And just like a typical liberal when you cannot logically prove your thesis you start hurling insults to make up for your lack of intellect.\n\nWell I will post my response here and answer this question.\n\nHow many economic classes have you taken?  I can definitely see not many.  Currency deflation is an economic strategy.  Did you know Japan has purposely deflated it's currency five time in the last 20 years?  Last time I checked Japan is the second largest economy in world.\n\nA weaker currency can be a bad thing, but not in the case of the US.  Our largest trading partners have their currency pegged to ours.  The commodities Americans need for everyday use are traded in dollars not foreign currencies, so the price of these good does not increase just because the dollar decreases.\n\nLet me give you a simple, easy macroeconomic example.  I will use the Euro and Microsoft.  The Euro is trading higher than the dollar, and next year Microsoft plans to release Vista.  This mean two things either Microsoft can sell Vista at a cheaper price meaning more Europeans will buy copies then they would have previously, which means that Microsoft will have even more revenue and expand the US economy.  Or the more likely scenario is that Microsoft will keep the price of Vista the same, since they probably figure they will sell just as many copies either way.  If they sell Vista at the same price they planned to sell it for two years ago, then since the Euro is worth more against the dollar, Microsoft will generate more revenue; and again expand the US economy.\n\nNow multiply this example by hundreds of tech companies, and thousands of other companies. The result is large economic expansion.\n\nNow, long term, meaning if the dollar stays low for 20, 30, or 40 years, there may be dire consequences.  Global commodity exchange markets could stop standardizing on the dollar, etc.  But that most likely will not happen, as the US economy grows because of the weaker dollar, the dollar will automatically increase in value.\n\nWhy don't you educate yourself before you make such asinine comments.  If just makes you look like a fool.\n\nNow to answer this question.\n\nWarming and cooling trends on the earth are cyclical and have nothing to do with the actions of human beings.\n\nIn fact, the current CO2 level is the lowest it has been in the entire geologic history of the earth.  In fact, grasses only evolved and started to flourish because they require less carbon dioxide than other plant life.  Likewise, many plant species became extinct because the level of carbon dioxide has decreased so dramatically.\n\n-------\nJake F. I cannot believe how stupid you are about to look.  So, the atmospheric carbon dioxide level today is the highest it has ever been ever, huh?\n\nWell, let's take a look at mid-Cretaceous period 120 to 90 Million years ago. During that period of geologic history the carbon dioxide levels where AT LEAST 2 to 4 times higher than they are today.  And the levels were even higher before the Cretaceous period.  \n\nRead it for yourself on the NOAA website, which is not some nameless site; but the National Oceanic & Atmospheric Administration!\n\nhttp://www.ncdc.noaa.gov/paleo/globalwarming/cretaceous.html\n\n\nI wish I could see the look on your face, and that face would be the face of the dumbest person on earth!\n\nOuch!  Burned toast!!\n\nRemember the earth is 4.5 billion years old, and has gone through numerous climate changes.  When people talk about global warming they are only looking at the past 100-200 years or maybe the past 1000 years of time, which isn't even one one-trillionth the amount of time the earth has existed.\n\nAnd micro pen, I do not care about making personal comments to you.  I would rather make them publicly, as far as the