Consider the following statements : The price of any currency in international market is decided by the I. > World Bank. II. > demand for goods/services provided by the country concerned. III. > stability of the government of the concerned country. IV. >

examrobotsa's picture

Submitted by examrobotsa on

Q: 16 (IAS/1998)
Consider the following statements : The price of any currency in international market is decided by the
I. World Bank.
II. demand for goods/services provided by the country concerned.
III. stability of the government of the concerned country.
IV. economic potential of the country in question.
Of these statements :

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,124,51,29,124,17,5

keywords: 

{'international market': [0, 1, 0, 0], 'economic potential': [0, 0, 0, 1], 'currency': [0, 1, 0, 3], 'stability': [1, 0, 0, 0], 'iv': [6, 110, 77, 8], 'demand': [0, 0, 0, 3], 'goods': [0, 1, 5, 27], 'concerned country': [0, 1, 0, 1]}

The correct statement among the given options is:

II and III are correct.

The price of a currency in the international market is primarily determined by the demand for goods and services provided by the country concerned. When a country`s exports are in high demand, there is a greater demand for its currency, leading to an increase in its value.

The stability of the government of the concerned country also plays a role in determining the price of its currency. Political stability is an important factor for investors and affects their confidence in the country`s economy. A stable government is generally perceived as favorable, which can positively impact the value of the currency.

The World Bank is not directly involved in determining the price of a currency in the international market. It is an international financial institution that provides loans and assistance to countries for development projects.

The economic potential of a country is indirectly reflected in the demand for its goods and services, which, as mentioned earlier, influences the price of its currency.

Therefore, statement II and III are correct, while statement I and IV are not directly involved in determining the price of a currency in the international market.

Practice this on app