The ________ analyzes the BOP and exchange rates in terms of money supply and money demand.
A)elasticities approach
B)"pass-through of devaluation"
C)monetary approach
D)absorption approach

Question

Quizplus · Accepted Answer

The monetary approach analyzes the BOP and exchange rates in terms of money supply and money demand by acknowledging the role of money in affecting the real economy. It argues that changes in the money supply can affect the demand for and supply of goods and services, and therefore affect the BOP and exchange rates. The other choices are not related to this analytical framework.

The ________ Analyzes the BOP and Exchange Rates in Terms