Questions tagged [currency]

a generally accepted form of money, including coins and paper notes , which is issued by a government and circulated within an economy.

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What does it mean for a country to use another country's currency?

Argentina's new President-elect is proposing replacing the peso with the US dollar as the country's currency. What exactly does it mean for country A to adopt country B's currency? And how does it ...
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Why does this example illustrating the effect of growth on exchange rates not work?

I'm looking for a (very) elementary explanation for why economic growth leads to one's currency becoming more valuable. This certainly seems like it should happen (example: "An economy ...
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Are the country adjectivals official in currencies?

Currencies are often named with a country adjectival in front, for example "Argentine Peso". Is the choice of adjectival official when alternatives exists? For example for argentina there is ...
skyking's user avatar
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What downside is there to making the USD the national currency for your country?

I get that for huge countries like China, you can't have the US controlling your currency. But for some smaller countries, or new fledgling countries, why not have the USD be your national currency? ...
chausies's user avatar
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How often (if ever) do currency exchange cross rates differ from actual rates?

Do major currencies' cross rates ever differ from their actual ('bilateral') exchange rates, and if so, how often does it happen in practice? I guess it would never happen (beyond, say, the fourth ...
stevec's user avatar
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Did both the U.S. and Zimbabwe economically benefit from dollarization?

Mugabe's leadership of Zimbabwe was harshly criticized by the U.S., citing human right abuses and economic mismanagement. Consequently, the U.S. congress passed the Zimbabwe Democracy and Economic ...
ATL_DEV's user avatar
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What is the difference in economy between country that uses national currency only and country that uses not only national currency?

What is the difference in economy between country that uses national currency only and country that uses not only national currency (for example, national currency + dollar)? Thanks.
Mike_bb's user avatar
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What would be a truly universal currency?

I have no clue where to ask this, so here it goes... With the advent of LK99 and its potential uses in recent solutions for modified Alcubierre drive fields, it pushes me to wonder: What if humanity ...
Skepta's user avatar
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When a currency is redenominated, do people with a lot of it lose?

When a currency is redenominated, for example 1,000,000 = 1, which is done in response to hyperinflation due to government abuse of moneyprinting, do the people with a lot of the currency lose? For ...
economics's user avatar
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What happens when a country trades with a specific country using that country's currency?

Suppose, a country X trades with another country Y using Y's currency rather than widely ...
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Determine the value of this hypothetical token

Suppose there is a token, an issuer of the token, and a reclaimer of the token. Every year at the beginning of the year the issuer creates and sells at auction 10 tokens. At the end of each year the ...
Jonah's user avatar
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Large quantity sale of CNY at current currency value

Some company wants to sell large quantity of CNY and buy USD on Forex. Let current currency value is 1 CNY = 0.14 USD at the time moment on Forex. When company sell large quantity of CNY, money supply ...
Mike_bb's user avatar
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Do borrowing costs go down as a currency depreciates?

I was watching a video (https://youtu.be/2CVOfzuqoY4) and got very confused by the following sentence at 1:18: "Usually when an established currency depreciates in value, borrowing costs in that ...
ayazasker's user avatar
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Which foreign currency has had the least amount of inflation over the last 50 years?

I found this table that lists currency exchange rates relative to the US dollar. https://fx.sauder.ubc.ca/etc/USDpages.pdf I noticed some currencies have increased in value relative to the dollar and ...
tstew's user avatar
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How to prove that an increase in the money supply leads to devaluation of the currency?

In one article I've read that increase in the money supply leads to inflation and exchange rate change. For example, if we have double increase in the money supply then we'll have double change in ...
Mike_bb's user avatar
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Does the US record tax receipts as cash on its balance sheet?

The currency in my wallet has the words “federal reserve note” on it. To me that implies that what I call money is actually a liability of the government. So when I pay taxes, isn’t that act actually ...
Chuck Fleischman's user avatar
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Do an increase in foreign investment increase the value of domestic currency?

I'm now studying about international trade and policy. I've known that higher interest rate would attract foreign investment therefore the demand for domestic's currency gone up and increase the value ...
Ecoman's user avatar
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How would a Central Bank Digital Currency be different from a private bank deposit?

Both are digital, both can be transferred digital, and both are denominated in the same currency. A CBDC is "a direct liability of the central bank, rather than of private banks or coin issuers&...
ras's user avatar
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Why was the massive outflow of silver before the first Opium War so bad for the British Empire?

TLDR I am a person without any significant knowledge of economics, so even though I have (I suspect) some partial answers, I need a better understanding of these. Background and question In accounts ...
Ludi's user avatar
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Meaning of Profit

As I understand it, economics is the study of trading goods or services that are limited in capacity. If two people have something the other wants, like one person has water and the other food, they ...
tyhir_brentlee's user avatar
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Visualizing the "Impossible Trinity"

I would like to create a data viz to show, in one chart, where some of the major economies are on the trilemma. It won't be perfect, but I'm just looking for a rough characterization. For my data viz ...
Arash Howaida's user avatar
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What happened to the Iranian Rial on August 1, 2014? [duplicate]

A student of my economics class showed me an astounding screenshot that, according to Google Finance, on August 1, 2014, the IRR made a very weird spike from 0.000040 USD = 1 IRR to 24 USD = 1 IRR. ...
Malek Kamal's user avatar
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Convert FAO's international dollar to current dollar

Related to Difference between the International Dollar and PPP. I am working with FAO production matrix, and it reports production in different units: constant 2014-2016 thousand I\$ current thousand ...
Pacha's user avatar
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Distinction between world reserve currency and world reserve asset

The two sound very similar, almost identical: The dollar as a world reserve currency The dollar as a world reserve asset But I'd venture there are important distinctions. As an asset, the dollar is ...
Arash Howaida's user avatar
2 votes
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Was the council bill system used in British India a wealth extraction mechanism?

Jason Hickel says that the council bill system used to pay exporters of Indian goods during the British Raj was a mechanism by which Britain extracted wealth from India without giving India anything ...
Edward H's user avatar
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1 answer
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What factors influence the price of a good?

I assume this is a really basic question but when people start using a currency the value of which isn’t pegged to any specific substance such as gold, how does that currency evolve to correlate with ...
Julius H.'s user avatar
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Covered interest rate parity: the forward contract is not risk free

Covered interest rate parity (CIRP or CIP) can be formulated as: $$ (1+r_{f,Home})=\frac{S_0}{F_{0\rightarrow 1}} (1+r_{f,Foreign}) $$ where $r_f$ are risk-free rates in the home and foreign countries,...
Richard Hardy's user avatar
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1 answer
51 views

Is there any need of digital currency given online payments through bank balance

Given talk about launch of retail digital rupee by RBI in India, is there any need for digital currency given online payments through bank balances of individuals/firms already serve the purpose?
Splendid Digital Solutions's user avatar
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86 views

What happens to the currency of a war winner?

Are there examples in history that teach what happens to the currency of a war winner? Is any of this knowledge transferrable to the current situation, with either Ukraine or Russia winning the war?
AlwaysLearning's user avatar
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Central bank balance sheets and money supply balances

I've compared the central bank balance sheets of many countries and I've found some numbers strange for me. The balance sheet of a central bank should include all the assets on one side and all the ...
SPS's user avatar
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If the value of the currency of an economy rises, then is it less desirable to trade with that economy?

I recently heard on a video that when the value of the currency of an economy rises, it is less desirable to trade with that economy. I couldn't understand it.
Brandon Cunnigham's user avatar
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How Demand of a product affects the currency

Question : Iron ore is Australia's largest export. Suppose that there was an unexpected increase in demand for Australia's iron ore exports globally. Explain what this would do to Australian Dollar ...
studenthere's user avatar
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1 answer
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How to determine exchange rate for a new currency

I have always read in present time currency exchange rate works on demand and supply But imagine tomorrow a brand new nation with brand new currency is born All its people are farmers and land is not ...
anuraag shukla's user avatar
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What are the consequences of a single global currency on trade?

Sorry for the general nature of the question but I find it difficult to wrap my head around the idea of a global currency. Let's say there existed a single global currency which was not controlled by ...
jojeyh's user avatar
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Can someone explain why sterling-dollar parity is bad?

Please forgive the probable naivety of this question. I am not an economics student I am just trying to understand the currency fluctuations that are currently occurring with GBP as a result of our ...
thomasbishop's user avatar
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Options, Futures and other derivatives, book by Hull, confusion of currencies

I have a small technical problem with a book by Hull: on the page 7, the first line, in the 11th edition of his book Options, Futures and Other Derivatives (please see the snippet below) he writes &...
user2925716's user avatar
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How did the first money owners get their money?

If certain people were the first money owners, then how did they get their money? How could someone have paid the first money owners with money, if nobody before the first money owners had any money?
rapt's user avatar
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What does THO, as in "USD THO", stand for in export statistics?

I've noticed that some online sources use "USD THO" as a unit to express rates of transfer of value. Specifically, I saw it in measuring Chinese exports to Russia in this video at 21:20 ...
H. H.'s user avatar
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2 answers
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What is meant by "faith" in the context of fiat currency?

I am reading a book on how money works and it has the following definition for fiat currency: "currency with value backed by faith in the government and economy." What does that mean exactly?...
Anthony Fallone's user avatar
1 vote
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How is a central bank able to control currency supply in an economy which has other banks and non-physical currency?

As I understand, in most economies, the central bank is supposed to be in charge of monetary policy, which in part means that they are supposed to be the only authority which can increase the amount ...
Agnishom Chattopadhyay's user avatar
3 votes
2 answers
91 views

Will the value of ruble decrease in the long term if the sanctions against Russia are not lifted?

For simplicity, let's take the example of the USD-to-RUB rate. Currently, Russia manages to maintain it at around 60 RUB per USD. However, as far as I understand it, they manage to do it by selling ...
Archil Zhvania's user avatar
5 votes
1 answer
162 views

How can the exchange rate be virtually constant with major inflation rate difference and a widening trade deficit?

I have recently had a discussion with a colleague about what seems to be a rather strange macroeconomic aspect in Romania (which has RON currency): EUR-RON exchange rate has been virtually a flat ...
Alexei's user avatar
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Perception of value between different currencies

So let's say I am going to sell a game and I'm trying to come up with a fair price. The thing is, I am from Brazil and I'm selling in an online platform where most products are priced in dollars. The ...
Gustavo HK's user avatar
1 vote
2 answers
56 views

Mechanisms to discover unbacked creation of foreign currency

Suppose there's a country called Crook Islands. The president is John Crook, one of his sons owns a bank called Crook Island Bank domicilated on Crook Islands, and the other son is the Minister of ...
Jeschu's user avatar
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Why does the dollar seem weak?

2:00 (GMT+8) - The FED raised interest rates at 0.75-percentage-point (75 basis points I believe, not sure with terminology but definitely now at 1.75%). But even so, why does the USD seem weaker? I ...
joshuaebs's user avatar
1 vote
1 answer
65 views

Mistake in Wikipedia article on Fixed exchange rate system?

I think there is a mistake in the following Wikipedia-article: https://en.wikipedia.org/wiki/Fixed_exchange_rate_system at figure 2 and 3. I think the ECB has to BUY (not sell) the dollars as in point ...
user6322383's user avatar
-1 votes
1 answer
49 views

Why does a stronger US dollar translate to potentially lower sales and earning for Microsoft?

A recent headline stated: "Microsoft Corp. cut sales and earnings guidance for the fourth quarter, citing unfavorable foreign exchange rates as the stronger U.S. dollar takes a toll." ...
End Anti-Semitic Hate's user avatar
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1k views

Which is most accepted - USD100 or USD 100?

With or without space after currency code? I'm seeing different versions. Here it says USD 100 but here is USD100. Which is the most accepted term?
ratib90486's user avatar
2 votes
1 answer
131 views

Currency vs purchasing power?

When I search the internet about which is the strongest currency, the answer is the currency which buys more from other currencies. For example if 1 euro can buy 10 dollars then euro is a stronger ...
entropyfeverone's user avatar
2 votes
0 answers
44 views

Why has the Yen weakened despite lower inflation?

I have recently wondered about the depreciation of the Japanese Yen against the USD (or any other major currency). Currently, a thousand Yen is at around USD 7,75. This is about about a twenty-year ...
ArOk's user avatar
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