ECO 201 Discussion Question Week 3

ECO 201 Discussion Question Week 3 - After reading the...

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After reading the chapters for unit 3, it is my opinion that the US could lose her status as the world’s largest and most productive economy. A lot of variables would have to come into play. The scariest thought is that it could happen overnight, although we have the opportunity to read the 'writing on the wall' so to speak. Since the end of World War II the US Dollar has been the world’s reserve currency. If that ever changes, our productivity and standard of living would change overnight. Some would feel it more than others, but we would all feel it. Most trading in the world goes on in US Dollars as well and oil is pegged to the US Dollar. For example, if Germany wants to buy a barrel of oil from Saudi ARAMCO, they must first purchase US Dollars to buy that barrel. The IMF has been pushing to replace the US Dollar with SDRs (Special Drawing Rights). SDRs are international foreign exchange reserve assets allocated to nations by the IMF; a SDR represents a claim to foreign currencies for which it may be exchanged in times of need. The IMF has
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