Rather than constructing their own currency baskets,many nations peg the value of their currencies to a currency basket defined by the International Monetary Fund.Which of the following illustrates this basket?
A) IMF tranche
B) Special Drawing Rights
C) Primary reserve asset
D) Swap facility

Question

Quizplus · Accepted Answer

Special Drawing Rights (SDRs) are a currency basket defined by the International Monetary Fund (IMF). SDRs are a unit of account that represents a basket of other currencies, such as the US dollar, euro, yen, pound sterling, and the Chinese renminbi. Many nations peg their currencies to this basket to help stabilize the value of their currencies.

Rather Than Constructing Their Own Currency Baskets,many Nations Peg the Value