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Consider the following statements regarding Reserve currency.
- A reserve currency is widely used in cross-border transactions.
- It is commonly held as reserves by central banks.
- Till now U.S. dollar is the only currency recognised as international reserve currency.
How many of the above statements is/are correct?
- a)Only one
- b)Only two
- c)All three
- d)None
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements regarding Reserve currency. A reserv...
Reserve Currency
Statement Analysis:
- Statement 1: A reserve currency is widely used in cross-border transactions.
- Statement 2: It is commonly held as reserves by central banks.
- Statement 3: Till now U.S. dollar is the only currency recognized as an international reserve currency.
Explanation:
- The first statement is correct as a reserve currency is indeed widely used in cross-border transactions due to its stability and acceptance in international trade.
- The second statement is also accurate as central banks around the world hold reserve currencies to stabilize their economies and facilitate international trade.
- The third statement is incorrect because while the U.S. dollar is the most dominant reserve currency globally, other currencies like the Euro and Japanese Yen are also recognized as international reserve currencies.
Conclusion:
- Therefore, only the second statement is correct, as reserve currencies are commonly held by central banks and used in cross-border transactions.
Statement Analysis:
- Statement 1: A reserve currency is widely used in cross-border transactions.
- Statement 2: It is commonly held as reserves by central banks.
- Statement 3: Till now U.S. dollar is the only currency recognized as an international reserve currency.
Explanation:
- The first statement is correct as a reserve currency is indeed widely used in cross-border transactions due to its stability and acceptance in international trade.
- The second statement is also accurate as central banks around the world hold reserve currencies to stabilize their economies and facilitate international trade.
- The third statement is incorrect because while the U.S. dollar is the most dominant reserve currency globally, other currencies like the Euro and Japanese Yen are also recognized as international reserve currencies.
Conclusion:
- Therefore, only the second statement is correct, as reserve currencies are commonly held by central banks and used in cross-border transactions.
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Community Answer
Consider the following statements regarding Reserve currency. A reserv...
Statement 3 is incorrect.
A reserve currency refers to any currency that is widely used in cross-border transactions and is commonly held as reserves by central banks.
Other currencies such as the British pound and the French franc have served as international reserve currencies in the past. It should be noted that it is the currencies of economic superpowers that have usually ended up being used as the global reserve currency. As the economic clout of these countries waned, their currencies faced a similar downfall. This was the case, for example, with the British pound which was gradually replaced by the U.S. dollar as Britain lost its status as a global economic superpower in the first half of the 20th century.
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Consider the following statements regarding Reserve currency. A reserve currency is widely used in cross-border transactions. It is commonly held as reserves by central banks. Till now U.S. dollar is the only currency recognised as international reserve currency.How many of the above statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer?
Question Description
Consider the following statements regarding Reserve currency. A reserve currency is widely used in cross-border transactions. It is commonly held as reserves by central banks. Till now U.S. dollar is the only currency recognised as international reserve currency.How many of the above statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding Reserve currency. A reserve currency is widely used in cross-border transactions. It is commonly held as reserves by central banks. Till now U.S. dollar is the only currency recognised as international reserve currency.How many of the above statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Reserve currency. A reserve currency is widely used in cross-border transactions. It is commonly held as reserves by central banks. Till now U.S. dollar is the only currency recognised as international reserve currency.How many of the above statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer?.
Consider the following statements regarding Reserve currency. A reserve currency is widely used in cross-border transactions. It is commonly held as reserves by central banks. Till now U.S. dollar is the only currency recognised as international reserve currency.How many of the above statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding Reserve currency. A reserve currency is widely used in cross-border transactions. It is commonly held as reserves by central banks. Till now U.S. dollar is the only currency recognised as international reserve currency.How many of the above statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding Reserve currency. A reserve currency is widely used in cross-border transactions. It is commonly held as reserves by central banks. Till now U.S. dollar is the only currency recognised as international reserve currency.How many of the above statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer?.
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