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Unformatted text preview: Michael Blasius April 10, 2008 Professor Mini Eco-114 The Devaluing of the American Dollar For many years now, the American dollar has been steadily losing value in comparison to foreign countries rising currencies. These currencies like the euro, the pound, and the yen have all been steadily increasing value in comparison to the dollar. This does not bode well for the American citizens’ pockets. While the value of their currency drops, they are gradually able to buy less and less with their money. Caused by a combination of high deficits, a general slowdown of the American economy, and the endless printing of cash by the government, the inflation affects everyone in America by reducing their spending power while prices are rising at the same exact time. Because of these factors, America’s overall productivity is decreased as people are less willing to buy and produce new goods and services. One cause for the dropping of the American dollar is the increase in federal spending deficits which have been so common lately. Each year, the federal government gets more in the habit of spending more money than it expects to receive from tax revenues thereby increasing the growing national debt. In order to remedy this symptom of an incredibly high national debt, the government chooses to spend more in...
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- Spring '08
- Macroeconomics, United States dollar, gross domestic product