Question

In: Economics

If someone argues that a strong dollar is "good for UAE" because UAE residents are able...

If someone argues that a strong dollar is "good for UAE" because UAE residents are able to exchange some of their GDP for greater amount of foreign GDP, is it true that a strong dollar is good for every UAE resident? why? (answer in terms of importer and exporter perspective).

Solutions

Expert Solution

UNITED ARAB EMRATES (UAE) currency is Dhirman. A strong dollar means it can buy more of the other countries currencies as its value is more compared to those countrys currencies. Here as we are discussing about the dhirman in our context currency means Dirham.

A strong dollar is not good for all the residents of the UAE.

--> A strong dollar is helpful for the investors those who invested in the Foreign direct investments in gaining some profits along with returns.

-->A strong dollar is really an added advantage to the countries like US, CANADA who will import more  from UAE , as they can buy more products per one dollar.

-->The companies in the united arab emirates will also be in a strong position in the other foreign countries due to this concept of strong dollar.

-->The major demerit for the UAE is the imports will be more costlier because as dollar comprises of more value when compared to the UAE's Dirham. Hence the imports will get reduced when compared to before.

-->This is also shows its affect on the sevaral organisations or companies that had elevated debts around the world and they have to face the risk.

-->As Dirham value is far less than the Dollar, It is difficult for the students those who have plans for higher eduaction in the other countries.


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