The concept of 'Currency Substitution' or 'Dollarisation' refers to:
A. The complete replacement of the domestic currency by a commodity standard
B. Only official dollarisation by law
C. Only the use of gold coins
D. The use of a foreign currency in parallel with or instead of the domestic currency
Answer: Option D
Solution (By JKSSB Mock Tests)
Currency substitution occurs when residents hold and use a foreign currency (often the US dollar) for transactions or as a store of value alongside or instead of the domestic currency.
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