3
QuizMultiple Choice

Currencies and Exchange Rates — Quiz

Question 3 • Economics

Which of these factors would strengthen demand for a nation’s currency on the international market? Choose four correct answers.

Answer
A
low unemployment rates
B
high gross domestic product
C
high domestic inflation
D
defeat in war
E
stability of government
F
victory in war

Explanation

A stable government and strong economic performance tend to build confidence in a nation’s currency. High GDP and low unemployment signal a productive, healthy economy, while victory in war can improve confidence in the country’s prospects. Defeat in war and high domestic inflation generally weaken confidence and demand for its currency.

AI-written and checked against the verified answer.

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