What Do the Terms “Strong Dollar” and “Weak Dollar” Mean?

ECO 372 Week 5 Discussion Question 1

What do the terms “strong dollar” and “weak dollar” mean? I want you to think about the company you work for, or your spouse works for, or a company that someone you know works for. Explain why the company would prefer either a weak or a strong dollar. What would you recommend the government do to make the dollar either stronger or weaker?

Answer:

The terms "strong" and "weak" dollars refer to the strength the bill has compared to other foreign currency. For example if the U.S. dollar has a good exchange rate, meaning you get more of another currency then what you put in with the U.S. currency then we have a strong dollar. On the flip side to that, if you exchange U.S. dollar bills and get less of another currency then what you put in, then we have a weak dollar.

If there was a company that worked on the international platform and dealt with sometime of exchange rate, I would imagine a company would want a strong dollar in order for them to get the "most for their buck." Working with a strong dollar will also attract other businesses knowing that your company has good money and can be trusted on a global market.

In order for the government to create a weak dollar, creating more money would ultimately flood the money market decreasing the value of our U.S. currency.

Who benefits from a tariff or quota? Who loses? Why would domestic markets benefit from protectionist trade policies? How do protectionist trade policies affect a government’s wealth and fiscal policy?

Answer:

A tariff is a tax placed on the goods and services either brought into the country or sent outside of the country. The goods taxed that are coming into the country raise the prices of those goods and encourage consumers to buy goods and services produced within their own country. Those placed on goods and services leaving the country make them more expensive and decrease the demand from other countries. Some of the winners are the companies that...