Depreciation of the dollar in foreign exchange markets


Question: Identify an event or policy that could cause a sharp depreciation of the dollar in foreign exchange markets (so possibly 0 domestic inflation but a loss of value in the foreign exchange markets). Here you will need to think in terms of something other than money supply or money supply driven inflation, so wars, natural disasters, default on debt are the sorts of things for which I am looking. How would this depreciation alter your behavior and what impact would it have on your firm?

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Microeconomics: Depreciation of the dollar in foreign exchange markets
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