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Governments can increase the value of their currency by reducing inflation, selling bonds, raising national interest rates, having a trade surplus or creating the perception
Governments can increase the value of their currency by reducing inflation, selling bonds, raising national interest rates, having a trade surplus or creating the perception that investing in their economy is safe. Governments can decrease the value of their currency by increasing inflation, buying bonds, lowering national interest rates, having a trade deficit, or creating the perception that investing in their economy is risky.
- What do the laws of supply and demand have to do with how government increase or decrease the value of currency?
- What are some specific examples of monetary policies (selling/buying bonds and raising/lowering national interest rates) that increase the value of currency?
- What are some specific examples of monetary policies (selling/buying bonds and raising/lowering national interest rates) that decrease the value of currency?
- What are some specific examples of fiscal policies (having a trade surplus/deficit and creating the perception that investing is safe/risky) that increase the value of currency?
- What are some specific examples of fiscal policies (having a trade surplus/deficit and creating the perception that investing is safe/risky) that decrease the value of currency?
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