Economics of Macro Issues 7th Edition by Roger LeRoy Miller,Daniel Benjamin

Exercise 2

In an effort to discourage drug smugglers from using U.S. currency in major drug deals, the U.S. government refuses to issue currency in denominations greater refuses to issue currency in denominations greater than $100. How does this policy decision affect the demand for dollars and thus the exchange rate between the dollar and othe currencies, such as the euro (which comes in denominations as big as 500, the equivalent of about $600)?