Homework SourseIn the current international monetary system what is the rol
In the current international monetary system, what is the role for gold?
It has no role.
Gold backs each currency, and therefore, the system as a whole.
It serves as the principal reserve asset.
The system is a gold-exchange standard, based on a fixed value for a key currency.
| a. | It has no role. | |
| b. | Gold backs each currency, and therefore, the system as a whole. | |
| c. | It serves as the principal reserve asset. | |
| d. | The system is a gold-exchange standard, based on a fixed value for a key currency. |
Solution
Gold had the important role in the international monetary system until the collapsed of Bretton Woods System of fixed exchange rate in 1973. Now, it acts as a asset in reserve holding.
So, the correct answer is an option (c).
