Assignment #5 (aka Quiz #5) The US dollar is a reserve currency by most all metrics of the meaning of reserve currency. It is held by foreign Central Banks in amount far in excess of what is required to facilitate ordinary transactions. it used as the medium of exchange in numerous transaction where neither side is a resident of the USA. it is the required means of payment for numerous bonds throughout the world by entities that are not based in the USA. There are numerous benet of being a reserve currency to a nation lucky enough to issue such a currency. At the most basic level if a national currency is used outside its home country and never returns to its home country the home country has the "exorbitant privilege" of issuing low cost paper for real goods and services that reflect the full value of the currency. A $100 USA bill buys 5100 of foreign goods and costthe USA economy about 15 cents to produceno wonder North Koreans counterfeit them as part of national policy! In addition USA based firms that buy and sell in dollars avoid the exchange rate risks many of their competitors in other nations are subject to! it is estimated that USA firms can finance their operations at a significantly lower cost of capital as their borrowing costs are lower than foreign firms that earn much oftheir income in nondollar currencies. Afirm in Argentina that is looking for international finance of a capital project will inevitably have to finance such an endeavor in dollarsand promise to pay back in dollarsmexposing it to significant risks if the Argentine peso declines. Lecture 12 outlines some of these points as dotwo articles from the Economist on the syllabus from 2011 and 2015. Your assignment is as follows: Find a magazine, newspaper or academic journal article that discusses issues associated with the USA dollar as a reserve currency. Alternatively find a story in fiction or factthat illustrates some aspect of reserve currency, preferably with respect to the USA dollar. ln a simple paragraph explain how the article fulfills the assignment and provide a link to the article or a download of it