Q. With reference to the “Reserve Currency” consider the following statements:
1.These are also known as soft currencies.
2.Reserve currencies are required to meet the gap between a country’s international payments and receipts.
3.These currencies are non-convertible currencies..
Which of the statements given above is/are correct?
Answer: B
Notes:
Explanation –
Statements 1 and 3 are incorrect. Reserve Currencies are known as hard currency. These currencies are fully convertible currencies.
Statement 2 is correct. Reserve currencies are required to meet the gap between a country’s international payments and receipts.
Source: ForumIAS
