Question

which of these factors would strengthen demand for a nations currency on the international market? choose four correct answers.
defeat in war
stability of government
low unemployment rates
victory in war
high domestic inflation
high gross domestic product

Explanation:

To determine factors strengthening a nation’s currency demand:

• Stability of government: Political stability boosts investor confidence, increasing currency demand.
• Low unemployment rates: Signals a strong economy, attracting foreign investment and demand for the currency.
• High gross domestic product (GDP): Indicates economic strength, making the currency more attractive.
• Victory in war: Improves national morale and economic prospects (e.g., reduced war costs, increased trade), strengthening currency demand.

Factors like “defeat in war” (weakens economy) and “high domestic inflation” (reduces currency value) do not strengthen demand.

Answer:

• stability of government
• low unemployment rates
• victory in war
• high gross domestic product