When money is devalued internationally, it makes goods bought overseas more expensive, while making our goods cheaper to foreign countries. It helps our employment, our company profits, etc. But because we buy oil from foreign countries, it increases the cost of gas. As we have been fracking, we have been able to pump more oil from existing wells; we are almost oil-independent, and this fact has caused OPEC a lot of concern. They are afraid we won't need them, and they will lose leverage over us. So it's a complex question. Typically, adding to the monetary supply as Ben Bernanke has been doing for months, would devalue our dollar. But domestic oil production and high unemployment has kept is from experiencing the worst of his actions, so far. What I fear is that we will experience a roaring inflation (and tanking of housing) as employment returns to 6% and lower.
10 months ago
Last edited at 4:55AM on 6/29/2013
It has 2 major effects, firstly it will make manufactured goods made in your country more competitive locally but more importantly make the goods you export cheaper for other countries to buy and means more work and more jobs, the bad part is the goods you import will increase in price. If you country is like here in Australia where our dollar is to high it means our companies close down and we lose jobs as that has been happening here for the past 5 years, and our exported products are just to expensive compared to china, india and pakistan. Lowering of the dollar can have a very good effect on a country in producing jobs in manufacturing and also encourage an increase on tourism here as we will be cheaper to visit and to spend money in , again producing jobs. I hope I have kept it simple for you Arjun , lowering can produce jobs but makes imported things dearer, but then if you get a job you can afford to buy things.