If dollar high what is the implication?

Question

If dollar high what is the implication?

Answer 1

If the value of the dollar increases:

1) it becomes less expensive for Americans to import goods from other countries. this boosts the real living standards of consumers, at least in the short run. however cheaper imports lead to rising import penetration and larger trade deficits

2) it becomes more expensive for foreigners who are importing goods into their countries, but this could have a negative impact on the American economy as countries may look to cheaper suppliers: American exporters lose market share and price competitiveness

3) the dollar becomes more valuable whenever demand exceeds available supply. (this doesn't mean that ppl want more money, they just prefer to hold their wealth in dollar-form)

4) The exact effect of the increase in the exchange rate depends on: wether the change in currency is in long-term or short-term; how businesses and consumers react to exchange rate flutuations and the scale/size of the change

Answer 2

Implication or impact

implication_ If the dollar is high the people are willing to exchange their currency for the "dollar" . They would want to do this if they knew that in the long term they would not lose money because the political/economical conditions are good in a diverse amount of criteria (economist.com) The states is the world currency because it is such a large and productive part of the world economy.

There are a ton of stem offs from this like dollar pegging or artifical rates, inflationary forces,trade value,etc...