there are other currencies which are stronger than the USD, yet it is the preferred currency of businesses around the world. does anyone know why this is so? am working on a paper for school.
2007-03-24 08:44:07 · 7 answers · asked by gang green 1 in Social Science ➔ Economics
Because the US economy is the largest source of foreign investment on the planet......and it happens that you need the US Dollar to invest here.
2007-03-27 06:59:48 · answer #1 · answered by Anonymous · 0⤊ 0⤋
From a historical perspective, it may be due to the Marshall Plan. After WWII, the US implemented a financial plan to help rebuild Europe. American suppliers sent goods abroad, however they were paid in US dollars. Most of the recipients, through another organization, paid for the goods in local currency.
On a separate note, almost all countries deal or have relationships with the US in trade (whether import/export). Some of these countries may not have trade relationships with each other. Thus, US currency is widely accepted since you can readily use it for another transaction. It's also much more stable than other currencies.
2007-03-24 16:19:55 · answer #2 · answered by Rebecca N 2 · 0⤊ 0⤋
These other answers are good, but I would also mention that it is also because oil is traded in dollars. Since oil is THE scarce resource of the world, the fact that it is traded in dollars means that many people prefer to have their transactions take place in dollars for ease of transactions...
The reason the oil producing countries pick oil is of course because we do have such a secure economy so they feel safe having the dollar as the currency of choice (just as historically, the british pound was the currency of choice). As another answerer says other currencies may get stronger against the dollar sometimes, but the dollar is still the secure/stable currency of the world.
2007-03-24 20:42:16 · answer #3 · answered by Alex K 3 · 0⤊ 0⤋
It's the most widely traded currency in the world. Many countries peg their currency to the USD, and most country's have large trade shares with the US. Not to mention that the US borrows from just about every country on the planet.
2007-03-24 16:08:25 · answer #4 · answered by Allan 6 · 1⤊ 0⤋
Because the US has a 12 trillion dollar economy. There's more faith in the stability of the dollar than other currencies. Sometimes a _______'s value against a dollar might be higher, but not as equivalent.
2007-03-24 15:51:14 · answer #5 · answered by Celebrate Life 3 · 0⤊ 0⤋
cuz we cool like dat
2007-03-24 16:52:48 · answer #6 · answered by noskillzorz 2 · 0⤊ 0⤋
It won't be for much longer.
2007-03-24 17:56:33 · answer #7 · answered by Anonymous · 0⤊ 0⤋