Global Material Economics. U.s. Dollar The World’s Reserve Currency (Research Paper Sample)
Primary Discussion Response is due by Friday (11:59:59pm Central), Peer Responses are due by Tuesday (11:59:59pm Central).
Primary Task Response: Within the Discussion Board area, write 400–600 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas.
In 1944, finance specialists and bankers from around the world met to discuss what the post-WWII monetary system would be. Given the instability of the pre-war period, the goal was to create a new system. The outcome of this was the Bretton Woods system, which had the U.S. dollar as the world reserve currency linked to gold at $35 an ounce. All other currencies were tied to the dollar with limits on how much they could appreciate or depreciate. The system lasted until the 1970s, when the United States decided to move away from gold convertibility. The modern system is based on supply and demand for currency and a managed float. Discuss the following in your main post:
The U.S. dollar remains the world's reserve currency. Is this good for the United States, and if so, why?
People usually think a "strong" dollar is good. Is this true for U.S. businesses, and does it help or hurt the U.S. balance of payments?
What I need is for a discussion board post
Global Material Economics
The U.S. dollar remains the world’s reserve currency. Is it good for the United States, and if so, why?
Having the U.S. dollar as the world’s reserve currency has had its advantages as well as disadvantages. The U.S. has greatly benefitted from having its currency be accepted worldwide and be used as a base currency. When companies and countries all over the world transact with the dollar, this is advantageous to the U.S. One thing this does is that it creates liquidity, which makes it easier for U.S. institutions and companies to access financial assets like loans. Increasing liquidity for the U.S. currency is also advantageous for the country because it makes it more appealing to, for example, the foreign exchange market. Today, the U.S. dollar boasts of being the most traded currency in the foreign exchange market, and this is attributed to the currency’s liquidity. So, as more people, countries, and companies open up to the idea of using the U.S. dollar in their transactions, doors of opportunity are opened for the U.S.