Question

In 250 words or more, Why do politicians talk so positively about the dollar’s decreasing value?

(please type and not write as it is hard to understand people's handwriting)

Answer 1

This is because US had been negatively impacted by the increase in value of US dollars over the past many years because of currency manipulations from other countries like China and also due to weakness in other exchange rates. We know higher value of dollars impacts its exports because higher the value means more expensive exports which will reduce demand fro US exports which is negative for the US economy as it will results in huge job losses and result in lower income levels which results in decline in aggregate demand in the economy.

So when there is trend reversal that means the dollar value is decreasing should be seen as positive news because it will lower cost of exports in terms of other countries exchange rate which is positive for US economy as higher US exorts would result in increase in the value of the US output as more output is sold which is combination of local sales and outside export sales. Higher output means more manufacturing sector jobs which will result in more wages and more salaries in hand of the US workers which is positive for the consumption and as consumption increases that means aggregate demand will rise which result in higher corporate profits which encourages the investment in economy and also results in more taxes for government resulting in higher government spending. So we should see 360 degree growth.

The above are the major reasons due to which politicians talk so positively about the dollar’s decreasing value and currently they are thinking that decreasing value is due to their pressure on China through President Trump.

the above is answer..