Exchange Rate unpredictability

The exchange rate can cause economic complications. For example, the countries of Euro were not able to manipulate the value of their cash against other Eurozone members. Because countries like Greece and Portugal had higher expansion rates, they became uncompetitive. Transports fell and they manufactured a large current account loss. The overvalued exchange rate caused a fall in commercial growth.

On the other hand, a fast weakening can cause different troubles. For example, when the price of oil dropped down, oil transporting countries saw a downturn in transporting revenues, leading to a fall in the value of the cash. A fast weakening causes the price of construction to rise and causes both higher inflation and lower development.

Development economics

Developing economies have faced similar commercial problems, but any issue is magnified by minimal GDP and high levels of famine. For example, unemployment in a growing economy is more deliberate because there is unlikely to be any authorized insurance to give a minimum standard of living

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Poverty cycle. Some growing economies may be stuck in a poverty ambush. Low development and low saving ratios lead to low levels of expenditure and therefore low commercial growth. This low development and hardship cause the low savings and expenditure to be continued.