Q3. Recall a barter trade case, where the number N of prices needed to complete exchanges among n goods and services (G&S) is equal to N = n(n -1)/2 without money (but to N = n if money is instead used). This case can be used to account for why the U.S. dollar plays a pivotal role in global forex markets as a vehicle currency. Explain why the U.S. has maintained trade deficits with about 100 countries because of this role of its currency since it de-linked the dollar from gold in 1970. An awful situation is that the U.S. prints the dollar and uses it to buy various G&S all over the world. -

Q3. Recall a barter trade case, where the number N of prices needed to complete exchanges among n goods and services (G&S) is equal to N = n(n -1)/2 without money (but to N = n if money is instead used). This case can be used to account for why the U.S. dollar plays a pivotal role in global forex markets as a vehicle currency. Explain why the U.S. has maintained trade deficits with about 100 countries because of this role of its currency since it de-linked the dollar from gold in 1970. An awful situation is that the U.S. prints the dollar and uses it to buy various G&S all over the world. -

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter13: Monetary Policy

Section: Chapter Questions

Problem 10E

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