Which factor plays a role in establishing the value of a country’s currency? A. the attractiveness of the currency design
B. the location of the country
C. supply and demand
D. distance between countries
Which factor plays a role in establishing the value of a country’s currency?
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The correct answer is C. supply and demand.
Supply and demand are fundamental economic concepts that determine the value of a currency. If there is a high demand for a currency and its supply is limited, the value will increase. Conversely, if there is more supply than demand, the value will decrease. This relationship is affected by various factors such as trade balances, inflation rates, and interest rates. Understanding how supply and demand influence currency value can help you grasp the basics of economics and finance! If you have more questions, feel free to ask or check the extended services page for deeper insights.