The problem of international liquidity is related to the non-availability of
[UPSC Civil Services Exam – 2015 Prelims]
(a) goods and services
(b) gold and silver
(c) dollars and other hard currencies
(d) exportable surplus
Answer: (c)
Explanation:
- The concept of international liquidity is associated with international payments that arise out of international trade in goods and services.
- International liquidity consists of all the resources that are available to the monetary authorities of countries for the purpose of meeting balance of payments deficits.
- Such liquidity ranges from assets readily available to resources that become available only after extensive negotiation.
- The primary medium of international liquidity are gold and those foreign currencies which are universally acceptable in the settlement of international transactions.
