Timed question

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Mid-Course Exam II

You must answer two of the three questions. Each answer should be in the range of 400-1000 words. Anything less than 400 words will probably not be enough to adequately answer the question. Anything more than 1000 words will be considered excessive.

Citations should be included only if your reference to a source is direct (e.g., a quote or statement of fact). The style of citations may be informal: title and date should be enough.

Questions

1. You are chief economic advisor to your nation’s president, and you are facing a crisis. The country’s balance of payments is in severe deficit, the domestic economy is in deep recession, and foreign investors are fleeing. Taking due account of both economic and political factors, what course of action (or actions) would you recommend?

2. The last twenty years have seen a rapid proliferation of regional trade agreements (also known as preferential trade agreements). Is this a good thing or a bad thing?

3. Nearly eight decades after Bretton Woods, the US dollar is still the world’s dominant international currency – way ahead of any other money in use for international purposes. But can that dominance last? Or is the greenback destined in time to be replaced by some rival such as the euro or China’s renminbi?