International Liquidity Problem

International liquidity refers to the availability of assets that can be used for international payments and settlements. The primary problem of international liquidity is the scarcity of hard currencies (especially the US dollar) and other widely accepted means of international payment that countries need to settle their international transactions. While goods and services (a) are traded internationally, they are not liquidity per se. Gold and silver (b) were historical reserves but are not the focus of modern international liquidity concerns. Exportable surplus (d) relates to a country's capacity to export, not international liquidity. > KEY: International Liquidity Crisis = Shortage of hard currencies (USD, EUR) and foreign exchange reserves needed for international trade settlement. Answer: (c).