ECONOMICS
ECONOMIC INSTITUTIONS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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7
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6
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4
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5
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Detailed explanation-1: -The value of the SDR is based on a basket of five currencies-the U.S. dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.
Detailed explanation-2: -The SDR is not a currency, but its value is based on a basket of five currencies-the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.
Detailed explanation-3: -The currency value of the SDR is determined by summing the values in U.S. dollars, based on market exchange rates, of a basket of major currencies (the U.S. dollar, Euro, Japanese yen, pound sterling and the Chinese renminbi).
Detailed explanation-4: -How can one calculate the value of an SDR? To calculate the value of the SDR in national currency (say, ABC), multiply the four exchange rates of the home country vis-à-vis the basket-currency countries (i.e., ABC/USD, ABC/EUR, ABC/JPY, and ABC/GBP) with the basket values indicated in the above table.
Detailed explanation-5: -Detailed Solution. The correct answer is Renminbi. The SDR is an international reserve asset, created by the IMF in 1969.