Question

Explain why there is a blurry line dividing objects that are "money" from those that are not.

(b) Give examples of some clear-cut cases, and some borderline ones.

(c) Could the position of this blurry line change over time?

(d) Why does the answer to (c) matter?

1. As we have discussed in class, though most countries have their own currency, country is not the same as currency area. For example, many different countries use the Eurod. On the other hand Hong Kong is part of China, but has its own currency e' (the HK dollar is even pegged to the US dollar, not the Renminbi). Based on this background: (a) Should Greater Vancouver have its own currency? (b) If yes, should that currency be pegged to the CAD, pegged to the USD, or float?

basically the Question is written in photo? and not the notes above the picture

Answer 1

a) Greater Vancouver if it wants to seperate out from rest of Canada and want itself to establish as a global trade /business destination it can have a seperate currency. This can help the metropolitan to move away from currency shocks in Canada and can be helpful to to attract portion of global businesses by showcasing it's robust economy and financial system.

b) If it wants to have a seperate curency it should be pegged to USD which is considered as more stable curency and is the most dominant currency for global trade this will help Vancouver to act as one of the major global financial/trade hub.