Decision Making in a Global Economy

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Decision-Making in a Global Economy Name Institution Decision Making in a Global Economy The US dollar has dominated reserve currency for the last decades. The end of Bretton Woods system in 1971 marked the end of the gold standards rates. Dollar's stability has made it be the most reserved currency across the world's banks and financial institutions. The economic stability of the US has further strengthened dollar as the dominant currency. Why the US Dollar is GoodThe US dollar being the world's reserve currency has faced significant number of challenges including financial crisis and a decrease of income in some parts of the world (Lee, 2014). Such crisis has caused more liabilities in different banks financial institutions. The regulations enforced to solve them made the dollar scarce and expensive to borrow. Despite the evidenced crisis in 2008 and 2017, the dollar has been effective for use due to its size and stability of the US economy. An increase in the US value evidenced in 2015 shows that the dollar is not losing its reserve currency (Pozsar, 2013). Foreign market exchange systems have evidenced the strength of the dollar. It is identified across the world's banks as a significant currency in forex transactions and trading activities. Moreover, foreign exchange transactions involve the US dollar. Different trading activities continue to be conducted through the use of the US dollar which makes it more stable compared to any other currency such as the Chinese Yuan (Lee, 2014). The US Treasury has an effective system that controls and maintains the purchasing power abroad. Therefore, the world's central banks are held in the form of the US dollar

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