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QuizMultiple Choice

Currencies and Exchange Rates — Quiz

Question 1 • Economics

Which factor plays a role in establishing the value of a country’s currency?

Answer
A
distance between countries
B
the attractiveness of the currency design
C
the location of the country
D
supply and demand

Explanation

A currency’s value is influenced by how much of it is available and how strongly people want to buy or hold it. This is the effect of supply and demand, so choice A is correct. A country’s location, its distance from other countries, and the currency’s design do not directly establish its value.

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