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Q. Explain why the dollar of the United States became the postwar world's key currency.
Answer:
1. The untimely convertibility of the U.S dollar in 1945.
2. The special position of the dollar in the Bretton Woods system.
3. The potency of the American economy relative to the devastated economies of Europe and Japan.
4. Central banks logically found it advantageous to hold their international reserves in the form of interest-bearing dollar assets.
Q. Based on the case study, "A Tale of Two Dollars," Illustrate why errors in the currency market will be more costly to the Toronto Blue Jays baseball team than errors in the fie
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Q. What is the national income identity for a closed economy? Answer: Y = C + I + G.
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