Explain why the United States dollar became the postwar world's key currency
What will be an ideal response?
(1 ) The early convertibility of the U.S. dollar in 1945.
(2 ) The special position of the dollar under the Bretton Woods system.
(3 ) The strength of the American economy relative to the devastated economies of Europe and Japan.
(4 ) Central banks naturally found it advantageous to hold their international reserves in the form of interest-bearing dollar assets.
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If workers and firms can fully anticipate the price change in the economy from a particular policy
A) then the policy will not impact employment levels. B) then the policy will not cause inflation. C) then the policy will be effective at changing employment levels. D) then the policy will be crowded out by the exchange rate.
A consumer equilibrium is depicted using indifference curve analysis as: a. the point where two indifference curves cross
b. the combination of two goods that minimizes total utility for a given level of income. c. the combination of two goods located where the highest attainable indifference curve is just tangent to the budget line. d. any combination of two goods where an indifference curve crosses the budget line.