ECONOMICS
MONEY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Currency is valued higher than coins
|
|
|
They have confidence in the government
|
|
|
Currency is the only type of money
|
|
|
All currency is backed up by gold
|
Detailed explanation-1: -The trust and confidence that the world has in the ability of the United States to pay its debts keep the dollar as the most redeemable currency for facilitating world commerce.
Detailed explanation-2: -As we know that USA is the biggest economy in the world that is why its dollar is accepted worldwide. 2. In today’s world the 80% of world trade take place in dollars. About 39% of the world’s loans are given in US dollars and 65% of dollar supply is used outside of the United States.
Detailed explanation-3: -Because many central banks and financial institutions around the world want to hold U.S. dollars and dollar-backed securities like U.S. Treasury bonds, there is strong demand for U.S. dollars. That demand, in turn, allows the United States to borrow more cheaply (at lower interest rates) than it would otherwise.
Detailed explanation-4: -Governments may defend their currency’s value at a certain desired level through participating in the foreign exchange market. The control of foreign exchange trading is the government’s way to manage the exchange rate at the desired level, which can be at an overvalued or undervalued rate.