Factors That Cause A Crisis With A Currency - 1545 Words

One factor which has the potential to cause a crisis with a currency is an unstable economy that has been or is in the process of economic deregulation. Without proper governance of the financial or economic systems of a country, the market price of a currency and the confidence in that currency may be weakened. If other countries perceive another economy to be weak, then certainty about investments in trade, industries, and the currency itself may fall. Countries and companies are less likely to participate in business with a country which has an unstable or poorly regulated economy, which can weaken a currency further. Another factor which may cause catastrophic economic and currency conditions would be a fragile economic structure. A†¦show more content†¦So, stable economic governance, capital controls, and proper development and administration of economic regulations lend to economic stability, which in turn can assist in the stabilization a currency. Immigration provides more workers for an economy which can encourage industry productivity in the host country. Additionally, there are more people to funnel money back into the economy by spending on living expenses, basic goods, and luxury goods. Immigration also increases the pool of taxpayers in a country. Finally, immigration can lead to a higher level of innovation within a country. In summary, the four benefits of immigration mentioned are: increased workforce/productivity, increased domestic spending, a larger tax pool, and more innovation. The aforementioned benefits of immigration are actually related. Take the U.S. for example. If the U.S. has an increased labor force and higher productivity as a result, people have more ability to spend and place their money back into the economy. More workers equals more taxpayers on federal, state, and local levels. Immigrants in highly skilled fields who choose to immigrate here may bring with them different ways of thinking and innovative ideas. Innovation in turn can increase productivity, and this can continue the cycle of economic benefits. One additional benefit that is not necessarily economic but relates somewhat to