Why is the u.s. dollar considered a vehicle currency, International Economics

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Q. Explain what a "vehicle currency" is. Why is the U.S. dollar considered a vehicle currency?

Answer: A vehicle currency is one specifically widely used to denominate international contracts made by parties who don't reside in the country that issues the vehicle currency. While 2001 ninety percent of foreign exchange transactions engross exchanges of foreign currencies for U.S. dollars so the dollar is considered a vehicle currency.


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