Running head: AMERICA DOES NOT NEED A STRONG DOLLAR
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America Does not Need a Strong Dollar
Lauren Bae
Principles of Economics – Professor Gutema
Howard County Community College
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AMERICA DOES NOT NEED A STRONG DOLLAR
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America Does Not Need a Strong Dollar
For the long-term period of American history the nation believed in a strong dollar policy,
which presumes the prosperity of the USA economy and its competitiveness on the world
markets. However, the fall of Golden standard in 70s completely changed the perception of the
dollar as the strong currency. Since that period the dollar remained weaker and at the moment it
is now costs $21.00 what $1 could buy in 1913. The problem is that it is not quite clear whether
the weak dollar is good or bad for the American economy. From the one side, when the value of
the U.S. dollar is strong relative to other currencies, the American economy becomes attractive
for investors and it is relatively cheap to purchase goods and services abroad. From the other
side, weak dollar in the period of recession can stimulate the domestic production, as the
American goods become cheaper. At the same time, the loss of purchasing power is the
