Which of the following is a feature of the 'Special Drawing Rights' allocation by the IMF?
A. A general allocation of SDRs provides unconditional liquidity to member countries in proportion to their quotas
B. SDRs are only available to countries with balance-of-payments needs under strict conditionality
C. SDRs can be used only for domestic fiscal spending
D. SDRs are a form of private cryptocurrency
Answer: Option A
Solution (By JKSSB Mock Tests)
A general SDR allocation distributes new SDRs to all IMF members in proportion to their quotas, thereby increasing global liquidity without the policy conditionality attached to IMF lending programmes.
Explanation:
A perfectly inelastic demand curve is a vertical straight line, indicating that quantity demanded does not change at all with changes in price.
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