PROBLEM IN UNIFORM CURRENCY FOR THE WORLD COUNTRIES
PROBLEM IN UNIFORM CURRENCY FOR THE WORLD COUNTRIES: all the countries in the world are not having the same economic condition. The currency of the poor countries would be cheaper than the rich countries. For example, the value of American Dollar is 74.3 in Indian Rupee.
In India’s export trade, major role is played by cloth and textile export. If a particular T-Shirt is Rs. 180/- in India, its’ price in America is only 2 Dollars, because Indian Rupee value for American value is Rs.74.3. therefore, American merchants come forward to buy T-Shirt from India and sell in America.
As Indian Govt print more Indian currency and release, cash flow increases. Therefore the value of each currency decreases and demonetization prevails. If the yield of tomato increases in a year, its price goes down to the bottom. Likely, if the yield decreases, its price goes up. Similarly if the cash flow in the circulation increases, its value decreases.
If the value of money decreases it is advantageous to the exports and if the value increases, it supports imports. Therefore, the Govt. formulates its policy of cash flow. The Govt of each country observes its exports and imports and set right the cash flow. Therefore it is not possible to have the same coin for the whole world.