The asset approach basically looks at ____ as the fundamental variable affecting _____ exchange rates.
A) interest rates; short-run
B) interest rates; long-run
C) the price level; short-run
D) the price level; long-run

Question

Quizplus · Accepted Answer

The asset approach to exchange rates focuses on interest rates as the fundamental variable affecting short-run exchange rates, as it considers the returns on assets denominated in different currencies.

The Asset Approach Basically Looks at ____ as the Fundamental