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Economy2012
Consider the following statements: The price of any currency in international market is decided by the
  1. World Bank
  2. Demand for goods/services provided by the country
  3. Stability of the government of the concerned country
  4. Economic potential of the country in question
Which of the statements given above are correct?

Explanation

The price of a currency in the international market is primarily influenced by the demand and supply for that currency, which is driven by factors such as demand for goods and services provided by the country (Statement 2) and the stability of the government, which affects investor confidence and overall economic performance (Statement 3). Economic potential (Statement 4) can also impact currency value but is more abstract and less directly quantifiable compared to immediate market perceptions of stability and demand. The World Bank (Statement 1) does not directly set currency prices; rather, it provides economic guidance and support, influencing conditions indirectly. Thus, only Statements 2 and 3 accurately reflect direct influences on currency pricing.

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