<p>No it doesn't.</p>
<p>In country A a TV costs A\$100 and the average wage is A\$1 per month.</p>
<p>In country B a TV costs B\$1000000 and the average wage is B\$1000000 per month.</p>
<p>The TVs are the same price so 1 A\$ = x B\$ where x=10000. If your idea was true, citizens of A would be richer.</p>
<p>But citizens of B are richer. They can buy 1 TV per month whereas citizens of A can only buy 1 TV every 100 months.</p>

CC BY-SA 4.0
2021-10-27T16:57:45.953Z
2021-10-27T16:57:45.953Z
Criticize SE actions means ban
<p>Assuming you are talking about GDP per capita when you talk about rich countries and poor countries. The exchange rate has no direct causal relationship with the rich or poor of a country. It's usually determined by many factors.
Just a simple example, the Japanese Yen has a really low value in the exchange rate, but is Japan poor?</p>

CC BY-SA 4.0
2021-10-24T19:41:39.860Z
*about rich and poor. sorry, it's a typo.
walter pu
CC BY-SA 4.0
2021-10-24T15:45:50.983Z
2021-10-24T19:42:13.660Z
2021-10-24T19:42:13.660Z
walter pu
<p>Suppose there are two countries, A and B and if 1 unit of currency of A = x units of currency of B <br>
And x&gt;1 does that mean that country A is richer or people are well off there?</p>

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2021-10-24T15:15:18.890Z
The answer is plain no, no matter how you specify the details.
Michael Greinecker
CC BY-SA 4.0
2021-10-24T16:25:09.163Z
(-1) This question does not show any research effort.
Giskard
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2021-10-24T22:39:32.150Z
Nominal exchange rate is just a nominal price of a currency in terms of the other, real exchange rate is the relative price of a currency in terms of the other currency. Prices are not measures or indicators  of richness/poorness.
manifold
<currency><exchange-rates><currency-exchange>
Do exchange rate indicate richness/poorness of a country
Rohit sharma
# Do exchange rate indicate richness/poorness of a country

(Asked by: username_0 on 2021-10-24)

Suppose there are two countries, A and B and if 1 unit of currency of A = x units of currency of B   
And x>1 does that mean that country A is richer or people are well off there?

**Tags:** currency, exchange-rates, currency-exchange
> **Comments:**
> **username_1**: The answer is plain no, no matter how you specify the details.  
> **username_2**: (-1) This question does not show any research effort.  
> **username_3**: Nominal exchange rate is just a nominal price of a currency in terms of the other, real exchange rate is the relative price of a currency in terms of the other currency. Prices are not measures or indicators  of richness/poorness.  

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## 2 answers

### Answer by username_4 on 2021-10-27. Score: 0

No it doesn't.

In country A a TV costs A\$100 and the average wage is A\$1 per month.

In country B a TV costs B\$1000000 and the average wage is B\$1000000 per month.

The TVs are the same price so 1 A\$ = x B\$ where x=10000. If your idea was true, citizens of A would be richer.

But citizens of B are richer. They can buy 1 TV per month whereas citizens of A can only buy 1 TV every 100 months.


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### Answer by username_5 on 2021-10-24. Score: 0

Assuming you are talking about GDP per capita when you talk about rich countries and poor countries. The exchange rate has no direct causal relationship with the rich or poor of a country. It's usually determined by many factors.
Just a simple example, the Japanese Yen has a really low value in the exchange rate, but is Japan poor?

> **Comments:**
> **username_5**: *about rich and poor. sorry, it's a typo.  

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