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by Running, Fall Up on September 19th, 2009

Running, Fall Up

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Why did the value of the dollar rise during the Great Depression?

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Answers. 3 helpful answers below.

  • by bolwerk on September 19th, 2009

    bolwerk

    The value of a currency is relative to what it can buy you. If everything suddenly costs an average 5 cents less, there's a relative rise in the value of the currency.

    That's basically what deflation is.

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  • by Kensum1 on September 19th, 2009

    Kensum1

    The value of the dollar did not rise? what on earth are you talking about.

    3 comments | Post one | Permalink

  • by SaulOhio on December 1st, 2010

    SaulOhio

    The central banks plays with interest rates, motivating banks to lend more money, you get more money through the fractional reserve system. Once the central bank raises rates to combat inflation, people who have become dependant on the low interest rates become unable to pay back the loans, people default, and all that new money goes back to the never-never land it came form.

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