The absorption approach to currency depreciation focuses on the
A) Purchasing power of money
B) Relative price effects
C) Income effects
D) Price elasticity of demand

Question

Quizplus · Accepted Answer

The absorption approach to currency depreciation emphasizes the impact on national income and expenditure, focusing on how changes in exchange rates affect the overall level of domestic absorption (consumption, investment, and government spending) relative to national income.

The Absorption Approach to Currency Depreciation Focuses on the