5min chapter

Think Like An Economist cover image

S E33: Exchange Rates & International Finance - The flow of currencies around the world

Think Like An Economist

CHAPTER

What Will Make People in Japan Want More Dollars?

The more expensive a currency like the dollar is, the less of it will be demanded. But on the flip side, the more americans will want to supply it so that they can buy foreign goods which now seem super cheap. Exchange rates are all about the interdependence principle. They're about global interdependence. There's another form of interdependence that really matters, and that's all about financial floes around the world. Has high interest rates sapped demand for dollars? And has lower taxes made American companies more attractive to invest in? What do you think? Share your thoughts with us at CNN iReport.

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