Outline and evaluate the economic effects of a fall in the value of the dollar?
As this question is asking you to ‘Outline and evaluate’, this question needs to be answered in two sections. The first section of the essay will provide examples of economic effects as a result in the fall of the dollar. This can include a boost in exports for US manufacturers. This is because it will be cheaper for other countries to buy the dollar, hence US products become cheaper. This in-turn increases the demand. Further points that could be developed include it becoming more expensive for the US to import, as well as the US current account improving.
Evaluation can either be written after each economic effect, or after all of the effects are written. In general, it looks more sophisticated if the economic effects are evaluated after each paragraph. An example of an evaluation point for the economic effect of exports increasing, is that if the US products are undesirable e.g. they are a bad quality, a fall in the exchange rate would not necessarily mean that demand for their products will rise.
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