If a country has an externally convertible currency
A) neither residents nor nonresidents are allowed to convert it into a foreign currency.
B) both residents and nonresidents can purchase unlimited amounts of a foreign currency with it.
C) only nonresidents may convert it into a foreign currency without any limitations.
D) the government limits convertibility to preserve foreign exchange reserves.

Question

Quizplus · Accepted Answer

A currency is said to be externally convertible when only nonresidents may convert it into a foreign currency without any limitations.

If a Country Has an Externally Convertible Currency