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 concerned 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 ?

The price of a currency in the international market is primarily determined by the forces of supply and demand [1]. Statement 1 is incorrect because the World Bank does not decide currency prices; it is an international financial institution focused on development. Statement 2 is correct as the demand for a country's goods and services directly increases the demand for its currency, thereby raising its value [1]. Statement 3 is correct because political stability is a critical factor; stable environments attract foreign capital and increase the desirability of holding that currency. Statement 4, while related to economic performance, is generally considered a secondary or long-term influence rather than a direct determinant of the immediate market price in standard economic theory. Therefore, the most accurate factors listed are the demand for goods/services and political stability.

Sources

1. [1] India and the Contemporary World – II. History-Class X . NCERT(Revised ed 2025) > Chapter 3: The Making of a Global World > New words > p. 77