The Dollar Exchange Rate

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Exchange Rate The value of the dollar rising or falling to a country depends on market forces and economics in that country. The reasons why the dollar is rising or falling decides the desirability of the dollar rising or falling. When compared to another country's currency, it can determine whether it is an advantage or disadvantage to the country's economy. The reasons why the dollar is rising or falling can also determine a weak or strong economy and can affect the economy in good and bad ways. Natural disasters had caused Japan to have a weak economy and the yen to rise. Businesses were buying other business abroad because weak economies in the other countries had caused the stock markets to fall and businesses were cheaper to buy. By buying businesses abroad, operations could be moved abroad to make it cheaper for the business to manufacturer products and import back into Japan. They could also acquire cheaper investments and bring in higher returns, depending on the economy of the country they were investing in. On the other hand, the automakers were primarily manufacturing and selling in Japan causing losses with a strong yen because exports were going out cheaper than they were producing the products for. With Japan's weak economy, domestic prices were rising. Between a weak economy, rising prices, and a strong yen, the automakers weren't bringing in enough money to survive. It had become necessary for them to make decisions whether to take operations abroad
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