A central bank's international reserves consists of its holdings of
A) gold.
B) silver and gold.
C) foreign assets and gold.
D) domestic assets and precious metals.
E) foreign and domestic currency holdings.

Question

Quizplus · Accepted Answer

A central bank's international reserves usually consist of a combination of foreign assets (such as foreign currency, foreign government bonds, and other foreign securities) and gold. However, since silver is not commonly held in international reserves, B is not the best choice. Similarly, D is not a suitable choice because central banks generally do not hold significant amounts of domestic assets in their international reserves. While E does mention foreign currency holdings, it does not account for the fact that gold is typically included in international reserves as well. Therefore, C is the best choice.

A Central Bank's International Reserves Consists of Its Holdings of