ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Although dollars are used commonly in many countries, the US dollar is really legal tender in only eight countries. These countries are: The United States of America, Ecuador, El Salvador, the Marshall Islands, Micronesia, Palau, East Timor and Zimbabwe. .

Detailed explanation-2: -All of Canada uses the Canadian dollar, however certain retailers throughout the country will accept the US dollar as a form of payment for goods. We highly suggest you to use the local currency to pay for goods and services.

Detailed explanation-3: -The United States dollar was established as the world’s foremost reserve currency by the Bretton Woods Agreement of 1944. It claimed this status from sterling after the devastation of two world wars and the massive spending of the United Kingdom’s gold reserves.

Detailed explanation-4: -This includes the bills and coins in people’s pockets and mattresses, the money on hand in bank vaults and all the deposits those banks have at reserve banks [source: Hamilton]. According to the Federal Reserve, there was $5.4 trillion in the M0 supply stream as of Dec. 31, 2022, the most recent data available.