ECON 345 Study Guide - Final Guide: Maurice Obstfeld, United States Dollar, United States Treasury Security
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The following questions are short answer: (15 points). Suppose quebec decides to leave canada and form its own country. Now they must decide whether to continue using the canadian dollar, or instead, adopt their own new currency. Be sure to relate your answer to mundell"s optimum currency area criteria: (20 points). Currently there is a boom in the world oil market, caused by an increase in world demand for oil. Use the dd-aa model to illustrate how this a ects the value of the canadian dollar. Why? (use the dd-aa model to illustrate the di erences): (25 points). In his article, the global capital market: benefactor or menance? , Maurice obstfeld refers to an open economy trilemma", which describes the con- straints and trade-o s facing monetary policy in open economies. How does obstfeld use this trilemma to explain the evolution of the international nancial system: (25 points). China has been pegging its currency to the u. s. dollar.
