The monetary approach in the case of a managed floating exchange rate:
A) Is like that of currency boards.
B) Introduces variables to represent changes in fiscal policy.
C) Is a combination of MABP and MAER.
D) Is not possible to model.

Question

Quizplus · Accepted Answer

The monetary approach in the case of a managed floating exchange rate is a combination of the Monetary Approach to the Balance of Payments (MABP) and the Monetary Approach to Exchange Rates (MAER). It considers both internal and external factors that affect the exchange rate, including changes in fiscal policy.

The Monetary Approach in the Case of a Managed Floating