How Does The Dollar Affect The Economy

1146 Words 5 Pages
Decrease of Value in American Dollar and Other Currencies and its Impact on Society
Over the past years the values of currencies throughout the world has fluctuated. This event of reduction has had an immense impact on our nation. “A currency devalues when its value declines in relation to one or more other currencies.” (Devaluation Definition) Due to the expansion of the money distribution, America’s currency has taken a negative turn. The graph below by,(Why Bitcoin Value vs. The Dollar Doesn 't Matter) shows the American’s power of the U.S. dollar decreasing. Since the year 1900 the value has dropped according to the graph, and since then it has continued to decrease. Once the worth of money changes, the economy will alter into a negative
…show more content…
Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service”(Inflation: What Is Inflation? | Investopedia). Inflation causes the value of dollar to not stay constant. As inflation of the dollar rises, the purchasing powers decreases. The prices of daily used items, such as gas will increase continuously due to the event of inflation and cause the value of dollar to decrease. How will this affect the society ? There are many ways the reduction in value of America’s currency will shape the …show more content…
Some countries devalue their currency on purpose for a certain reason. According to "3 Reasons Why Countries Devalue Their Currency.", “Countries may change the value of their dollar to boost exports,to shrink trade deficits, and to reduce debt.”(15) Surrounding countries changing the value of their money can affect others, which includes the United States of America. Prices increase and decrease due to the change of the value in cash, making a change in society’s everyday life. Without controlling how much the value of currencies change in America and other places it will take a massive adjustment for the people not just in the U.S., but it other countries as

Related Documents