How Can A Country Be Regarded As Developed Or Underdeveloped

2833 Words12 Pages
Table of content
1. Abstract
2. Introduction
3. How can a country be regarded as developed or underdeveloped
4. Definitions of currency
5. exchange rate theory determination
6. Stability of a currency
7. How is stability achieved and why is it an utmost important for countries to sustain
8. How did the developed countries managed to have achieved strong and stable currency and why are the developing countries failing to achieve that.
9. Merits and demerits of a country having strong currency, and advantages and disadvantages of a country having a weaker currency
10. Empirical evidence
11. conclusion

This paper analyzes the facts behind how developed countries are able to achieve strong currencies through the exchange rate mechanisms as well as fiscal and monetary policies to ensure stability of the currency. It shows how the exchange rate is affected through several factors such as inflation rate, interest rate, current account and etcetera.
On the other hand it analyzes how developing countries rather have weak and very unstable currency given the methods above.

In most of the cases developed countries (e.g Norway, England, united kingdom, Switzerland, etcetera) tend to have a very strong currencies relative to the under developed or developing countries (e.g Mozambique, Rwanda, Angola, and etcetera) and also have a good currency stabilization, this essay shall explain why that is the case.

To have a good understanding of currency volatility
Get Access