United States dollar

9. How would the following transactions affect U.S. net capital outflow? Also, state whether each involves direct investment or portfolio investment. a. An American cellular phone company establishes an office in the Czech Republic. Answer: When an American cellular phone company establishes an office in the Czech Republic, U.S. net

– CA (d) S > I  CA (e) S < I  CA 6. If the dollar interest rate is 10 percent, the euro interest rate is 6 percent, and the expected return on dollar depreciation against the euro is zero percent, then (a) An investor should invest only in dollars. (b) An investor should invest only in euros. (c) An investor should be indifferent between dollars and euros. (d) It is impossible to tell given the information. (e) All of the above. 7. If the dollar interest rate is 10 percent, the euro interest

surplus of specifics imports brought into the U.S., American companies suffer because of enlarged foreign competition. A specific product that is an import surplus is crude oil. According to the Wall Street Journal’s 2011 report, they predicted that United States would encounter an oil surplus. The reason the U.S. had a surplus of oil was that the U.S. continued to import as much oil as

6) A – An increase in U.S. imports 7) C – Aggregate demand shifts inward 8) B – Lower interest rates 9) C – Foreign capital will be attracted to the United States and the dollar with appreciate. 10) D – Inflows and exchange rate appreciation Open Ended Question 1) • Concerns about the safety/stability of foreign assets relative to the United States. People want to invest and save their money in a currency that is not in danger of becoming worthless (like Germany’s after World War I ) • Foreign economic

what is meant in terms of a world reserve currency in the financial world giving details of how the U.S. dollar became the prominent title owner. The paper will proceed to give a detailed understanding of the interworking of the world reserve currency with international trade and its importance to the U.S. economy. Also, the paper will mention the looming threats to dethrone the “all mighty dollar” of its world reserve currency status with far reaching ramifications to the American economy if that

change that. The agreement they struck, known as the Bretton Woods system, provided what they believed to be the necessary infrastructure to facilitate this increasingly global economy. All currencies would have a set exchange rate, in gold-backed dollar terms. This would, in theory, make global transactions involving different currencies simple and easy to regulate. The International Monetary Fund was established to make sure that these exchanges ran smoothly and that countries could meet their obligations

currency of the Peoples Republic of China. It is an emerging currency that some think will vie for an alternative to the US dollar or the Euro as a leading currency in the international foreign exchange markets. The United States is the leading economy in the world and has been for decades. The US dollar is the most used currency in the world. Several countries besides the United States use it as their official or de facto currency. China’s economic policy is based on managing the yuan’s rate of exchange

most powerful entity within the United States government. Leaders within our government have the ability to manipulate the Dollar’s value in order to try and control the economy’s flow of goods and services. If the economy is seeing a spike in prices at the grocery store that means there is inflation and the Federal Reserve can withhold dollars from entering the system – creating a lower amount of available dollars to spend, ultimately increasing the value of the dollar and lowering the prices at the

purchased, change will be given back. It is also very likely that the change included multiple pennies. These pennies will then proceed to be left in a pocket and forgotten, never to be used again because their purchasing power is non-existent. The United States government should discontinue the manufacturing of pennies. Pennies do not serve the primary role of currency anymore. Also, pennies are uneconomical to produce and waste taxpayers’ money by lining the pockets of corporations. Lastly, many other

Issue: Devaluation of the U.S dollar Argument: America needs to go back to the Gold standard to prevent the devaluation and collapse of our current fiat based currency system Intro a) Attention getter: In today’s money, 17 dollars was the equivalent to only 1 dollar in the 1940’s, that’s an inflation level well over 1000%. b) Thesis: The U.S government needs to revert back to the Gold standard because there are no controls on the government to prevent the devaluation and ultimate collapse of our