Question

In the Fixed Fiduciary System, RBI can issue currency without gold backing up to:

• A. Any limit
• B. Government decision
• C. Fiduciary limit
• D. Foreign exchange limit

Answer 1

Answer:

C. Fiduciary limit

In this system they fixed a amount to be issued within limit backed by government securities above fixed backed by 100% backed by gold.The maximum amount allowed for such issuance is called the fiduciary limit, ensuring a balance between flexibility and public confidence in the currency.