Question

As a consumer, when would you favour a strong dollar? What about a weak dollar? Would you consider these factors differently as an employee or employer?

Answer 1

A strong or weak dollar affects different groups of consumers in a different way in an economy. A consumer favors a strong dollar compared to a weak dollar. The strong dollar is most favored in the case of imports and exports.

The dollar rate of imports is reduced with the help of a strong dollar which in turn assists the consumer to purchase an affordable cost. Taking a wider view, a strong dollar assists the domestic population by increasing the bargaining power and improving their terms of trade with the outside world. A strong dollar favors the customer when he gets a higher worth for the dollar he invested in the exchange deal of trade.

A weak dollar suggests that a person can purchase less foreign currency as compared to the strong dollar. It indicates the consumers must pay more for the goods that are being imported from foreign countries. The foreign customers will have to pay less for products and services which will, even more, assist to increase production and work opportunity

The element of a strong dollar varies from employee and company viewpoint. A strong dollar favors customers by imports when some of those customers have their employment in export-related markets too. There will be less helpful for export-oriented businesses due to the strong dollar.

If the dollar is weakening, employment in export-related industries might likely benefit, but the greater domestic rates connected with export products will lower that benefit to a certain level and the higher prices for imports will lower it even more.