Question

Discuss disadvantages of a weaker US dollar in detail and illustrate your examples

Answer 1

Disadvantages of a weaker U.S. dollar -

A weaker dollar may boosts the GDP during an economic downturn but it has many disadvantages too.

1. Weak dollar can increase the price of the imported goods which obviously would reduce the consumer spendings. Retailers would not get much revenue.
2. Due to the national dependency, the prices of the gasoline increases when the dollar value would go down.
3. Weaken dollar value may lead to cut off the skilled and needed employees from companies.
4. Weaker dollar value would decrease the purcahse of imported products such as automobiles, jewellery, diamond, alcohol etc.

Hope this helps :)