Question

The following transaction shows the dollar as a vehicle currency:
Select one:

A)dollar transaction between a US and a Chinese entity

B)dollar transaction between a European and a Japanese entity

C)dollar transaction between two US entities

D)yen transaction between a Japanese and a US entity

Answer 1

Answer-

The correct Option is B. dollar transaction between a European and a Japanese entity.

The currency used for international trade transaction, especially when it is not the national currency of either the importer or the exporter is the vehicle currency.

The transaction in option B is between two entities and dollar is not the domestic currency between a European and a Japanese entity.

The Options A,C and D are incorrect.

Option A is incorrect as US is a national currency.
Option C is incorrect as both US entities have dollar as currency.
Option D is incorrect as yen is the transaction currency instead of dollar.