Unit of reference for much of international trade

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Some have voiced concerned about the US dollar being the unit of reference for much of international trade. List 3 consequences of the US dollar losing this unique status and being replaced by a basket of 4 currencies.

Assume the company for which you work is considering investing directly in Brazil by building a plant in Rio. You have worked in that project for 2 years and just as the decision to go ahead is to be made, the Real (Brazil’s currency) suddenly devalues by 20 percent. List 2 positive and 2 negative consequences of the devaluation.

Reference no: EM131131444

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