Market forces can easily determine a currency's international role,yet government decree is most important in determining the international reserve currency status of a currency.

Question

Quizplus · Accepted Answer

Market forces such as trade balances, capital flows, and economic stability play a significant role in determining a currency's international role, but the status of a currency as an international reserve currency is also heavily influenced by factors like trust in the currency's value, the size of the economy, and the depth of financial markets, not just government decree.

Market Forces Can Easily Determine a Currency's International Role,yet Government