Like why can’t some country say something like “our country’s currency value will be 200 times that of US dollars ” . And who determines this value or how it is determined. And why it constantly changes.
In: Economics
You can actually do this. China did it for a long time, it’s generally referred to as currency manipulation. What everyone above said is correct except in the instance where a government has near total control over the economy. In the instance of China, the Communist system gave the government the ability to artificially adjust the value of the currency.
To me, the more interesting question is why would you want to do this? In China’s case, keeping the value of the yuan artificially low meant that Chinese exports became much cheaper than the market would otherwise dictate. There is a lot more to it, but it is a big factor in why “everything is made in China”.
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