GS PrelimsEconomyExternal Sector2010 Which of the following is/are treated as artificial currency ?
Correct Answer: Option C
Explanation
1. Artificial currency refers to a unit of account or reserve asset that is not issued by a single country as legal tender but serves certain monetary functions, often internationally.
2. ADR (American Depositary Receipt) and GDR (Global Depositary Receipt) are certificates representing ownership of shares in a foreign company, traded on local stock exchanges. They are financial instruments representing equity, not currencies, artificial or otherwise.
3. SDR (Special Drawing Rights) is an international reserve asset created and maintained by the International Monetary Fund (IMF). Its value is based on a basket of major currencies. It serves as the IMF's unit of account and is held by central banks as part of their foreign exchange reserves. Due to its nature as a reserve asset created by an international institution and not being a national currency, it is often referred to as an 'artificial currency' or 'paper gold'.
4. Therefore, only SDR (C) fits the description of an artificial currency.
Master UPSC Revision
Get 10,000+ topic-wise MCQs, spaced repetition, daily CSAT challenges, and detailed performance analytics.
Coming Soon to Play Store