How does the value of a country’s currency affect the relative price of its goods on the global market?
And why would a country want it currency to be undervalued? Thanks!
The lower the value, the cheaper a country’s exports are to other countries, and the more expensive imports are to that country. A country would want an undervalued currency to stimulate export growth and encourage domestic production by making imports expensive.
December 23rd, 2009 at 2:40 pm
The lower the value, the cheaper a country’s exports are to other countries, and the more expensive imports are to that country. A country would want an undervalued currency to stimulate export growth and encourage domestic production by making imports expensive.
References :