Question

The Currency Principle states that:

• A. Notes should be partially backed by gold
• B. Notes should be fully backed by government securities
• C. Notes should be 100% backed by gold
• D. Notes need no backing

Answer 1

Answer:

C. Notes should be 100% backed by gold

According to this principle, every currency note issued by the central bank must be fully backed by 100% god backing, ensuring stability and public confidence in the currency.