The principle determinant of the long-term value of a state's currency is __________.

Question

Quizplus · Accepted Answer

The supply and demand of a currency is the primary determinant of its long-term value. When a country's currency is in high demand, its value increases, and when it is in low demand, its value decreases. This is influenced by factors such as interest rates, economic growth, and political stability. While fiscal health, trade balance, and speculation can also impact a currency's value in the short term, in the long-term, supply and demand is the most significant factor.

The Principle Determinant of the Long-Term Value of a State's