Class Notes (906,006)
CA (538,586)
UTSC (32,642)
POLC99H3 (33)
Lecture

Lecture 07 Notes

3 Pages
79 Views

Department
Political Science
Course Code
POLC99H3
Professor
Norla Carloff

This preview shows page 1. Sign up to view the full 3 pages of the document.
Lecture 06
The Supply of Financial Markets and the International Monetary System:
Multilateral Cooperation & Key Currency
U.S. Dollars crisis dropped since the financial crisis
International investors are buying U.S. assets as they see it as viable still
Dollar is on the rise again
During economic times investors will flee the USD
USD is still the number one asset to rely upon
Global Currency Rivalry Centers areound the strengths and benefits of the Euro
against the USD
Benefits and costs of Key Currency System
Sources of key currency status
Future of the Dollar as key
Systemic benefits and costs:
oCan be used as medium of exchange
oUnit of account
oStore of value
oWorks as a function amongst various public/private actors
oCheck for key benefits across various functions
oThe USD has a medium of exchange
oAs a vehicle currency the USD is used to purchase goods and services and assets
across the world
oRather than trading, banks find it beneficial to trade one currency against the USD
rather than match two currencies
oUses efficiency gains gain for the banks (trading less currencies)
oUses working currency rather than several currencies
oUnit of Account: using currencies for a particular type of good (such as
homogenous goods) goods not differentiated by their quality; commodities
oReduces information costs
oUniform/similar regardless of where and how it is produced the markets are
highly competitive
oDemand uncertainty causes this competition/values when exporters currencies
appreciate domestic value; they reduce demand uncertainty
oPricing goods when they are easily identifiable and substitutable
Not true if the commodity can be distinguished; price differences resulting
from quality
oHedging against either demand or against price (revenues) systemic benefit
oA single currency versus multiple currencies
oVolatility in the exchange rate of the key currency is an issue this raises
information costs
www.notesolution.com

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.

Leah — University of Toronto

OneClass has been such a huge help in my studies at UofT especially since I am a transfer student. OneClass is the study buddy I never had before and definitely gives me the extra push to get from a B to an A!

Leah — University of Toronto
Saarim — University of Michigan

Balancing social life With academics can be difficult, that is why I'm so glad that OneClass is out there where I can find the top notes for all of my classes. Now I can be the all-star student I want to be.

Saarim — University of Michigan
Jenna — University of Wisconsin

As a college student living on a college budget, I love how easy it is to earn gift cards just by submitting my notes.

Jenna — University of Wisconsin
Anne — University of California

OneClass has allowed me to catch up with my most difficult course! #lifesaver

Anne — University of California
Description
Lecture 06 The Supply of Financial Markets and the International Monetary System: Multilateral Cooperation & Key Currency U.S. Dollars crisis dropped since the financial crisis International investors are buying U.S. assets as they see it as viable still Dollar is on the rise again During economic times investors will flee the USD USD is still the number one asset to rely upon Global Currency Rivalry Centers areound the strengths and benefits of the Euro against the USD Benefits and costs of Key Currency System Sources of key currency status Future of the Dollar as key Systemic benefits and costs: o Can be used as medium of exchange o Unit of account o Store of value o Works as a function amongst various publicprivate actors o Check for key benefits across various functions o The USD has a medium of exchange o As a vehicle currency the USD is used to purchase goods and services and assets across the world o Rather than trading, banks find it beneficial to trade one currency against the USD
More Less
Unlock Document


Only page 1 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit