Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 25, Problem 1.4P
To determine
Why people in Zimb accepts the US dollar as payments for the goods and services.
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To ensure that paper money will be accepted, the U.S. government implicitly promises the public that
Group of answer choices
it will not change currency denominations so that the paper currencies U.S. citizens have will continue to be used for exchanges.
the U.S. monetary system will always be backed by a precious metal.
it will not print money so fast that it loses its value.
it will not change the rate at which the dollar is exchanged for other currencies.
The euro is the official currency of almost all of the European Union as well as several smaller countries. It is the second-most traded currency in the world after the United States dollar. As of August 2018, with more than €1.2 trillion in circulation, the euro has one of the highest combined values of banknotes and coins in circulation in the world, having surpassed the U.S. dollar. By March 2002 it had completely replaced the former currencies of the European Union countries.
Do you think that a common currency for North America (the U.S., Canada and Mexico) would be a good idea? Would it help facilitate trade? Why?
Some countries, many being developing countries, peg their currency to the US dollar. What effect does a rapid appreciation or devaluation of the dollar have on those countries? If you were an exporter from an emerging country to the United States would you prefer a strong or weak dollar?
Chapter 25 Solutions
Principles of Economics (12th Edition)
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