Friday, May 15, 2015

Dollar Appreciation and Depreciation

By 
Appreciation
  • Each dollar gets you more of the other currency
  • More of the foreign currency is needed to buy each dollar
  • US exports get more expensive for foreigners
    • US imports get cheaper for us
  • Exports decrease, imports increase, GDP decrease
  • Demand for the U.S. dollar will increase
  • Supply for the U.S. dollar decrease
Depreciation
  • Each dollar gets you less of the other currency
  • Exports increase, imports decrease, GDP increase
  • US exports get cheaper for foreigners to buy
  • US imports get more expensive for US
  • Demand of US dollar decrease
  • Supply of US dollar increase
  • Sources of Supply and Demand
  • Supply of US dollar comes from:
    • US citizens
    • Banks
    • Industries wanting to make foreign purchases
    • Investments
    • Assets
    • By making transfer payments to foreigners
  • Demand of the U.S. dollar comes from:
    • Foreigners
    • Banks
    • Industries wanting to purchase our goods
    • Investments
    • Assets
    • Make transfer payments to us


2 comments:

  1. UnknownMay 18, 2015 at 5:22 AM

    I really appreciate you separating appreciation and depreciation. The notes are very clear and organized and easy on the eyes. They're simple and informative which I think is the best way to go. Good job!

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  2. UnknownMay 18, 2015 at 6:48 AM

    I really like how organized your post is, the points are there and it's simplistic. However, I wish you would give real world examples of each point, and so we can have a better understand of how it applies to the real world.

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