A idea of decreasing the value of currency

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Hi it is me, Williams, again. Today i am gonna write my opinion about the idea whether or not my country should decrease the value of its currency.

Why did i write this?

It is just i am going to have a debate about this problem this weekend so a little practice does not hurt. By the way, anyone who incidentally read this could have a general view about this economics idea.

What is the purpose ?

By doing this, the foreign currencies will be more expensive. It is, therefore , to make the domestic products more competitive in the world market by lowering the selling price, while limiting the import. 

How will it impact the economy?

A decrease in the value of the money will absolutely lead to a temporary volatility of the balance of trade which means the quantity and quality of import and export products will change dramatically. In short-term, as companies are not able to change their policies and the consumers are still dubious about the quality of domestic products, the import will overwhelm the export. However, in a long run (about 2-3 years ), the export value will rise and the main aim will be achieved.

On the contrary, many economists argue that this is a terrible idea since it will collapse the economy and make the country depend on other kind of money, notably U.S dollar. Moreover, they also point out that there are many products which are created from raw parts imported from other markets. This means it will not necessarily decrease the price of products but somewhat has the opposite effect.

To recap, this is generally seen as a bad idea. Fortunately, it is just theoretical and the authorities is reluctant to apply it.



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