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Read again carefully what you quoted. It exactly supports my claim. > Export dependent nations may actively encourage a weak currency in order to boost their e
by currenciessfe 4y ago
Read again carefully what you quoted. It exactly supports my claim.
> Export dependent nations may actively encourage a weak currency in order to boost their exports.
> A weak currency may help a country's exports gain market share when its goods are less expensive compared to goods priced in stronger currencies. The increase in sales may boost economic growth and jobs while increasing profits for companies conducting business in foreign markets
https://www.investopedia.com/terms/s/weak-currency.asp https://www.investopedia.com/terms/s/weak-currency.asp
- lottin 4y agoDo you read your own quotes? Where does it support your claim that a weakened currency does not affect the price of exports? It says the exact opposite. Exports increase because they become less expensive: > A weak currency may help a country's exports gain market share when its goods are less expensive compared to goods priced in stronger currencies. The increase in sales may boost economic growth and jobs while increasing profits for companies conducting business in foreign markets
- wonnor 4y agoThe person you are arguing with said this: >But then you can invest that extra profit in decreasing your foreign currency price, thus becoming more competitive.
- lottin 4y agoYeah, which is baffling. It's not possible to invest in decreasing your foreign currency price. Price is an exogenous variable in a competitive market. You can invest in the production process so that production becomes more cost-effective and this allows you to lower prices, but that has nothing to do with devaluations, and certainly is not the mechanism through which exports prices fall when a currency depreciates.