Which of the following statements is TRUE about a vehicle currency?
A) It is widely used to denominate contracts made by parties who reside in the country that issues the vehicle currency.
B) The dollar is sometimes called a vehicle currency because of its pivotal role in many foreign exchange deals.
C) There is much skepticism that the euro will ever evolve into a vehicle currency on par with the dollar.
D) The pound sterling, once second only to the dollar as a key international currency, is beginning to rise in importance.
E) Vehicle currencies include nondeliverable currencies like the renminbi.

Question

Quizplus · Accepted Answer

The statement "The dollar is sometimes called a vehicle currency because of its pivotal role in many foreign exchange deals" is true. A vehicle currency is a currency that is widely used in international trade and finance as a medium of exchange or as a reference currency. The dollar is a common vehicle currency, and the euro is also sometimes considered to be one. The other statements are either false or not completely accurate.

Which of the Following Statements Is TRUE About a Vehicle