I have always wonder why its so much stronger ? when you go to Japan, everything is cheaper in a sense and the U.S dollar means more in Japan. Why is that ?
In: Economics
For people wondering why some countries’ currencies (like Kuwait’s dinar) are worth more vs another country’s (e.g. USD)
Supply and demand.
Imagine you have a small business selling thingamabobs with a small, but dedicated customer base. Your thingamabobs are priced at 10 arbitrary units, and people happily buy it, but you have trouble expanding your customer base. Your current customers are satisfied, and your business isn’t expanding, so it doesn’t make sense to stock more thingamabobs because you’d have more than you could sell, and you wouldn’t want to then lower your price in order to get it off the shelf.
Meanwhile, your competitor sells baubles for 8 arbitrary units, and they sell SO MANY baubles that they can’t keep up, and they make more baubles than they did the day before every single day of business. Everyone in the town has at least one bauble! Yet despite the ubiquity of baubles, customers can’t stop buying them— they’re bauble obsessed! And they’ll happily pay 8 arbitrary units all day— maybe even more! But your competitor has tuned their supply line so finely that they’ll always make just enough to satisfy customer demand for that day, so no need to raise prices when they can just sell more product.
Where you sell maybe 1,000 thingamabobs a year for 10,000 total arbitrary units, your competitor sold 10,000 baubles last year for 80,000 arbitrary units.
Who has the more valuable product?
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