Which of the Following Represents a Problem with the SDR

question 148

Multiple Choice

Which of the following represents a problem with the SDR yuan becoming a reserve currency?

• A) The SDR does not include the U.S. dollar.
• B) The SDR does not have an established settlement mechanism.
• C) The SDR gets too much of its value from the Chinese yuan.
• D) The SDR is only available to a small group of countries.

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Definitions:

Financing

The act of providing funds for business activities, making purchases, or investing, including methods such as loans, equity investment, and other mechanisms of raising capital.

Presentation Currency

The currency in which financial statements are presented by a company.

Management Choice

The discretion allowed to company management in selecting among various allowed accounting methods and policies in reporting financial information.

Accounting Standards

Rules and guidelines set by regulatory bodies that dictate how financial transactions and accounting practices should be recorded and reported.