Could China's Currency Be The New World Reserve? part 2: Advantages of Reserve Currency & China's Plan

The video discusses the advantages of the US dollar being the world's reserve currency, such as reduced exchange rate risk and increased attractiveness to investors. It highlights the political power the US gains from this status. The video also explores China's efforts to promote the yuan as a global currency through trade and infrastructure projects like the Belt and Road Initiative. It explains how trade dynamics influence currency settlement choices and the impact of international loans on currency reserves.

What is one major advantage for American companies when the US dollar is the world's reserve currency?

• Reduced exchange rate risk

• Limited access to foreign markets

• Increased domestic competition

• Higher import taxes

How does the US benefit politically from having the world's reserve currency?

• It can easily devalue other currencies.

• It can restrict international trade.

• It can impose its laws on international financial institutions.

• It can control global oil prices.

What is China's primary tool to promote the yuan on the global stage?

• Trade agreements

• Cultural exchanges

• Tourism incentives

• Military expansion

What is the Belt and Road Initiative primarily focused on?

• Expanding China's tourism industry

• Promoting Chinese cuisine

• Providing trade infrastructure

• Developing military bases

Why do countries need to hold reserves in a foreign currency when they have debts in that currency?

• To reduce inflation

• To avoid defaulting on loans

• To improve diplomatic relations

• To increase their GDP