dollars．Any shift in the dollar’s exchange rate will benefit some and hurt others． (2) The dollar’S exchange rate has been too volatile and unpredictable．Several years ago the
dollar was rapidly declining in value. (3) The rise in the price of foreign goods made it possible for U．S．businesses to raise the price of competing goods produced here，thus worsening inflation．Foreigners who dealt in dollars or who held dollars as reserves were hurt．People in the United States who had borrowed foreign currencies found that they had to pay back more than they borrowed because the declining dollar would buy fewer units of the foreign
money (4)
The dollar went soaring upward．a(chǎn)nd the situation was reversed．United States exporters
found it hard to sell abroad because foreigners would have to pay more for U．S．dollars．People in the United States now bought the relatively cheaper foreign goods，and U．S．manufacturers
complained that they could not compete．Job losses were often blamed on the“overvalued”
dollar. Poor nations that had borrowed dollars found it difficult to repay both the 10ans and the
interest because they had to use more and more of their own currencies to obtain dollars． (5) We might even return to the gold standard.
Fixed exchange rates did not work in the past．Currency values should be determined by
market conditions．A drop in the exchange value of a nation’s currency means that it is
importing too much，that it is too inefficient to compete in World markets，that it is permitting a
high rate of inflation which makes its goods too expensive，that it is going too deeply in debt，or
that others have lost confidence in the nation’s stability．A nation should bring its exchange rate
back up by addressing these problems，not by interfering with the money market．
dollar was rapidly declining in value. (3) The rise in the price of foreign goods made it possible for U．S．businesses to raise the price of competing goods produced here，thus worsening inflation．Foreigners who dealt in dollars or who held dollars as reserves were hurt．People in the United States who had borrowed foreign currencies found that they had to pay back more than they borrowed because the declining dollar would buy fewer units of the foreign
money (4)
The dollar went soaring upward．a(chǎn)nd the situation was reversed．United States exporters
found it hard to sell abroad because foreigners would have to pay more for U．S．dollars．People in the United States now bought the relatively cheaper foreign goods，and U．S．manufacturers
complained that they could not compete．Job losses were often blamed on the“overvalued”
dollar. Poor nations that had borrowed dollars found it difficult to repay both the 10ans and the
interest because they had to use more and more of their own currencies to obtain dollars． (5) We might even return to the gold standard.
Fixed exchange rates did not work in the past．Currency values should be determined by
market conditions．A drop in the exchange value of a nation’s currency means that it is
importing too much，that it is too inefficient to compete in World markets，that it is permitting a
high rate of inflation which makes its goods too expensive，that it is going too deeply in debt，or
that others have lost confidence in the nation’s stability．A nation should bring its exchange rate
back up by addressing these problems，not by interfering with the money market．