The 'dollarization' of an economy means: MCQ with Answer and Explanation

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The 'dollarization' of an economy means:

A. pegging to the dollar

B. exporting to the US only

C. adopting the US dollar as the official currency

D. buying US bonds

Answer: Option C

Solution (By JKSSB Mock Tests)

Dollarization occurs when a country adopts the US dollar as its official currency.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

In the context of demand analysis, the Engel Curve shows the relationship between:

A. Price and quantity demanded

B. Cost and output

C. Price and supply

D. Income and quantity demanded

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Correct Answer: Option D

Explanation:
The Engel Curve illustrates how the quantity demanded of a good changes as consumer income changes, holding prices constant.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'injection' into the circular flow in a three-sector economy includes:

A. government expenditure and investment

B. imports

C. saving

D. taxes

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Correct Answer: Option A

Explanation:
In a three-sector economy, injections include investment and government expenditure.

This question belongs to: Economy GK Economy Set 1

Question #3

The Reserve Tranche Position in India's forex reserves refers to:

A. gold held by RBI

B. India's quota subscription to IMF paid in foreign currency that can be drawn without conditions

C. SDR holdings

D. foreign currency assets held abroad

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Correct Answer: Option B

Explanation:
The Reserve Tranche Position is India's IMF quota subscription held in foreign currency.

This question belongs to: Economy GK Economy Set 1

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