Question

In the present day, the value of a country's currency reflects
A. whether the country has a trade deficit or a trade surplus
B. the productive capacity of that country's economy
C. the military and political strength of that country
D. the demand for that country's goods and services

Answer 1

D. The value of a country's currency today is primarily determined by supply and demand for that currency — driven largely by demand for the country's goods, services and assets (exports, investment inflows), rather than simply its trade balance, military strength, or only its productive capacity.