3
QuizMultiple Choice

Currencies and Exchange Rates

Question 3 • IL-Economics

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

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

Explanation

A currency’s value is influenced by how much people want it compared with how much is available. When demand rises relative to supply, its value tends to increase; when supply rises relative to demand, its value tends to fall. Therefore, supply and demand is the relevant factor.

AI-written and checked against the verified answer.

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