In the Monetary Approach to the Exchange Rate, Which One

question 8

Multiple Choice

In the monetary approach to the exchange rate, which one of the following will cause a depreciation of A's currency relative to B's currency?

• A) an increase in the amount of money demanded at each income level in country B
• B) an increase in the money supply in country B
• C) a fall in real income in country B
• D) a decrease in the money supply in country A