Question

The idea of the 'currency convertibility' as it is used by the economies today originated in which of the following ?

• A. Marshall Plan
• B. Washington Consensus
• C. Geneva Convention
• D. None of the above

Answer 1

Answer: (D)

None of the above

Currency convertibility is the ease with which a country's currency can be converted into gold or another currency. Currency convertibility is important for international commerce as globally sourced goods must be paid for in an agreed upon currency that may not be the buyer's domestic currency. The value of money is determined by the demand for it, just like the value of goods and services. There are three ways to measure the value of the dollar. The first is how much the dollar will buy in foreign currencies. That's what the exchange rate measures.