Interrelation with exports in business - Research Paper Example

Business One of the central concerns related to currency is its interrelation with exports. A general rule recognizes that the falling United s dollar results in increased exports. There are a variety of reasons for this process. The main understanding, however, is that as the dollar decreases in value United States exports increasingly become more competitive in the international market ("Effects of a," 2010). This process then motivates increased purchasing by international vendors and consumers.

This process has a varying impact on United States businesses. While one would assume that such processes would have a beneficial impact, this is not always the case. One concern is the impact of import costs. Oftentimes there are goods that are necessary for product that can only be purchased internationally (Rosenbush, 2012). The increase of prices for these products would negatively impact United States businesses. Another consideration is in terms of larger macroeconomic elements. While in the short-term a falling dollar can beneficially impact United States businesses, if the United States currency continues to depreciate over extended periods then this rising inflation can potentially result in rising unemployment rates (Hagerty, 2012).

This unemployment would then have a negative impact on United States businesses for a variety of reasons. Still another consideration is that the falling United States dollar could potentially result in a situation where foreign and even domestic investors grow wary of investing in the United States (Hagerty, 2012). This lack of foreign investment or domestic spending would then result in economic stagnation within the United States, ultimately having a negative impact on business. References Effects of a falling dollar. (2010). Retrieved from http://www.

economicshelp.org/macroeconomics/macroessays/effects-falling- dollar.html Hagerty, J. (2012). A falling dollar pushes exports, draws risks . Retrieved from http://online.wsj.com/article/SB10001424052702304760604576427913530425954.html Rosenbush, S. (2012). The pros and cons of a weak dollar. Retrieved from http://www.businessweek.com/bwdaily/dnflash/nov2004/nf20041112_3507_db039.htm