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<p id="isPasted">Well the strength of currency by itself is a very significant indicator of the state of an economy. But it is essential to count in various other parameters to understand the economy. Value of currency basically indicates its demand in the global market. This in turn is driven by the amount of foreign investment happening in the economy, To do business in a country it has to be done in its currency. So if a greater foreign investment is flowing in a greater amount oh home currency will be bought by these investors. So a rising value would indicate an …</p>
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<p><br>GDP is one of the key indicators usually taken into consideration when comparing economic health of a country. There are others like PPI (Producer Price Index), CPI (Consumer Price Index), employment statistics, stock market averages, inflation etc. Some other newer areas that have emerged are more quality driven such as income equality, life expectancy, citizen wellbeing etc.</p>
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<p id="isPasted">It depends on how you assess the value of the currency. If you simply looked at the current value of the Korean won against the US dollar and saw that it was 1,133 won to a dollar, you would get the wrong impression that the Korean won is weak and that the economy is doing poorly.</p><p>Typically, such as disparate exchange rate indicates a poorly performing economy. hyperinflation and currency depreciation are the usual causes of such disparities. However, the relevance of this is only important if the depreciation is currently taking place.</p>
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<p id="isPasted">Yes - mostly. A currency's value depends on the perception of its value by those accepting it. Currency used to be underpinned by things of intrinsic value (like gold and silver) but in modern times it does not even have to exist as a 'thing' - electronic fund transfers for example. A (country's) currency is therefore tied closely to the economic strength of that country due to market forces - supply and demand - for the currency. Strong economic strength increases demand for the currency.</p><p>Some exchange rates are fixed by the issuing country rather than a free market. Usually, …</p>
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