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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.
The Source of Comparative Advantage can be understood as follows: The source of comparative advantage could be productivity differential (Ricardo) or differences in the factor
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Q. What can you learn from the figure below, which depicts the US GNP and its components for the year 1997? Answer: The U.S. GNP is about 8 trillion expenditure represents
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Q. What do you think about dollarization? Answer: The respond is almost certainly a bad idea unless in the very short run. It must talk about the loss of seigniorage a
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Q. What has been learned since 1973 with regard to the experience with floating exchange rate regime? Answer: 1. Monetary policy autonomy: Yes though floating rate didn
The latest economic investigations report that the recent earthquake, tsunami and nuclear disaster have led to an economic recession in Japan. This recession may reduce the demand
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