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Why did France demand that Germany repay their debts in foreign currency?
Wiki User
∙ 7y ago
If a country is permitted to repay its debts in its own currency, they can simply print significant amounts of currency, leading to massive inflation in the short term, to satisfy the numerical quantity of the debt, but not pay it in real terms.
Imagine it this way. France tells Germany that it must pay France 5 million Deutschmarks, which is worth 10 million Francs. Germany goes and simply prints out 5 million new Deutschmarks. Now, since there are so many new Deutschmarks, the value of those new Deutschmarks is now 3 million Francs. So, when France receives the money, it receives far less than expected. Conversely, since Germany cannot print more Francs, if payment is requested in Francs, it needs to actually provide currency or material which would be equivalent to 10 million Francs.
Wiki User
∙ 7y ago
joseph rug
Why did France demand that Germany repay their debt in foreign currency?
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What were some of the act committed by German forces that prompted Britain and France to declare war on Hitler?
German troops attacked Poland on Septemer 1st 1939. Britain and France declared war on Germany two days later. But also before that, Germany had been taking and bringing other countries into the Third Reich. France was conquered in as little as 6 weeks which showed how well Germany's army was built.
Was Britain and France appeasement reasonable?
According to some, appeasement was reasonable because Great Britain and France were in no shape to fight another war with Germany. The only other option was appeasement, which allowed Germany to take control of the Sudetenland. Some say that it encouraged Germany to demand even more, but to most officials in France and Great Britain, appeasement was the most reasonable solution.
What is inflation according to Hawtrey?
Inflation results from an increase in the amount of circulating currency beyond the needs of trade; an oversupply of currency is created, and, in accordance with the law of supply and demand, the value of money decreases. This is because excess demand means that aggregate demand is growing faster then the capacity of an economy to supply.
How were Britain and France to blame for World War 2?
That's a strange interpretation of history! In the late 1930's, Britain and France had a defence agreement with Poland which stated that if Poland was attacked by another country, Britain and France would come to its aid. On September 1st 1939, German troops invaded Poland without warning. Britain and France then issued an ultimatum to Germany saying that if they did not immediately withdraw their troops from Poland, 'a state of war would exist'. Germany totally ignored the demand to withdraw, so on September 3rd 1939, Britain and France jointly declared war on Germany.
Controversial us british demand on Germany and japan that substituted for a second front?
U.S.-British demand for "unconditional surrender
What factors determine the demand for a foreign currency?
The demand for a foreign currency is based on how many buyers are in the market. Generally speaking, when a corporation seeks to buy products from another company in a foreign country, that corporation will need to make the purchase in the currency of the aforementioned company. Usually their bank will enter the foreign exchange market on behalf of their client and buy the currency required. The greater the demand for that currency, the higher its price.
What is the impact on currency when there is foreign investment?
Foreign investment can have both positive and negative impacts on a country's currency. If there is a significant inflow of foreign investment, it can increase the demand for the country's currency, leading to an appreciation in its value. On the other hand, if foreign investors withdraw their investments, it can decrease the demand for the currency and lead to its depreciation. The impact ultimately depends on various factors such as the size of investment, overall economic conditions, and market sentiment.
What causes currency rate to change?
Demand and supply of domestic currencies with respect to other foreign currency causes currency rates to change.
Where can one find information on the foreign currency trade?
One popular site for foreign currency trading is Forex On Demand, which not only is a platform for foreign currency trading but also offers informational articles about foreign currency trades. Another popular site for foreign currency trading is the XE website, which includes a help section as well as a forum to learn more about it.
What demand of Germany did Britain and France make?
Unconditional Surrender
How the foreign exchange rate is calculated?
the foreign exchange rate is determined by the supply and demand of the market. If the demand of a certain currency pair is greater than the supply the price will rise and vice versa.
What are the sources of supply of foreign exchange?
The supply of foreign exchange of a given country stems from the sale of foreign merchandise, services, and capital to that country. When foreigners want to buy a country's exports, they must purchase it currency with their own. Thus the supply of one country's currency available to a second country is closely related to the demand for the second country's currency. When the demand schedule of a given country for a foreign currency is known, the supply schedule of the foreign country's exchange can be frequently derived from it. BY TAVINDER SINGH CAREER BUILDER C-1503 INDIRA NAGAR,LUCKNOW
Who or what determines the exchange rates in the foreign currency market?
Currently exchange rates are determined by laws of supply and demand.
Why some currencies are worth more than others?
it depends on many factors such as interest rate,economy health and foreign trade. if your interest rate is high, investers are more willing to buy your currency as it will have high return for them. if your inflation is low, you are going to have more investors thus more demand for your local currency. the value of your currency will go up if you have foreign trade(exports) by wich foreign currencies enter your country resulting in demand and uppreciating local currency.
Why does the demand curve slope downward in a foreign exchange market?
When foreign exchange rate decreases, the product of that particular country becomes cheaper as its currency depreciates. Therefore, the quantity demanded of that currency will increase as consumers from other nations wish to take advantage of the depreciating currency.
What are foreign currencies?
Convert one type of currency into another at a given exchange rate. That rate is determined by the supply and demand of the desired currency plus processing fees and/or commissions charged by the retail institution. The market where everyone can exchange currency into another called Forex (foreign exchange) market.
What is foreign demand?
It is the foreign demand for domestic goods and services.
