Which approach considers the extent by which foreign and domestic prices adjust to a change in the exchange rate in the short run?
A) the monetary approach
B) the absorption approach
C) the expenditure approach
D) the pass-through approach

Question

Quizplus · Accepted Answer

The pass-through approach considers the extent by which foreign and domestic prices adjust to a change in the exchange rate in the short run. The other approaches (monetary, absorption, and expenditure) do not focus specifically on this aspect of exchange rate changes.

Which Approach Considers the Extent by Which Foreign and Domestic