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Depreciation of Dollar
Recently, many patients are hit by the higher expenses on gas, foods, other products, etc, which directly affect their medical treatment expenses. One major factor causing recent inflation was the depreciation of U.S. dollar. The depreciation of dollar was a policy to stimulate the increase of U.S. exports. However, more and more evidences indicate that this policy might do more harms than good to Americans. 1. For Export Companies For companies engaging in export, it's true that a weaken dollar will help export. However, in current global economy, many companies buy their raw materials and products from other countries. A weaken dollar means more expensive purchase of raw materials and products. For example, suppose a weaken dollar can increase export by 5%. But the cost to purchase foreign products will also increase by 5 % or so due to weaken dollar. As a result, the increased export will be offset by the increased cost in purchasing the raw materials and other products used for production. Conclusion: for export companies, the net result of dollar depreciation is about even. There is not much advantage to depreciate the dollar for export companies. 2. For Non-Export Companies For companies not engaging in export (more companies fall into this category), the weaken dollar will only increase the cost and hurt the companies. Conclusion: for non-export companies, the dollar depreciation has disadvantage only. 3. For Public For American peoples, a weaken dollar only means higher gas and foods prices, higher prices for most other products. When salary is unchanged, increase of gas, foods, and other product's prices means decrease of salary and income. So depreciating dollar is equal to decreasing all American's salary and income. Conclusion: for American peoples, the dollar depreciation has disadvantage only. In sum, the policy of dollar depreciation will do more harm than good to Americans.
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