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United States: Understanding Reserve Currency

United States: Understanding Reserve Currency

A reserve currency is the international currency  unit for pricing of products such as gold, silver oil, and corn. It is excepted "globally" as an acceptable method of tender/currency as payment every where in the world.

Reserve currency (or anchor currency) is a currency that is held in significant quantities by governments and institutions as part of their foreign exchange reserves. The reserve currency is commonly used in international transactions and often considered a hard currency or safe-haven currency. People who live in a country that issues a reserve currency can purchase imports and borrow across borders more cheaply than people in other nations because they don't need to exchange their currency to do so.

Reserve Currency: Definition


Reserve Currency


A Countries worldy accepted paper money used for purchasing. (USD Is the Current Reserve Currency)


E.G: Bob goes to China, but only has $20 in U.S Money; Bob can buy chinese food with it. Bob later exchanges the rest for Chinese "Yuan" money


Bob later returns to the U.S with 460 Chinese Yuan and wants to buy a Big Mac at Mcdonalds but only has Chinese Yuan.


Bob cannot buy the Big Mac because Mc Donalds doesn't accept Chinese Money