What are the two types of currencies discussed in the Currencies module?

The correct answer highlights the distinction between major currencies and emerging market currencies, which is critical in understanding global financial markets. Major currencies, like the U.S. Dollar, Euro, and Japanese Yen, are widely traded and recognized in international transactions, providing liquidity and stability. These currencies are usually associated with strong and developed economies.

Emerging market currencies, on the other hand, belong to countries with developing economies. They tend to be less stable and more volatile due to factors such as political instability, lower liquidity, and economic fluctuations. Understanding the difference between these two types helps investors gauge risks and opportunities in foreign exchange markets.

The other options each mention categories that do not align as distinct types within the framework typically discussed in currency markets. For example, fiat and digital currencies concern the nature of the currency itself rather than its market classification, while commodity and minor currencies do not adequately cover the broad distinctions relevant in the Currencies module. The focus on major and emerging market currencies provides a more comprehensive understanding of how different currencies operate within the global economy.