Under a System of Flexible Exchange Rates, the Portfolio Balance

question 15

Multiple Choice

Under a system of flexible exchange rates, the portfolio balance approach suggests that an increase in real income in a home country will lead to __________ of that country's Currency; under flexible rates, the monetary approach suggests that an increase in real Income in a home country __________ of that country's currency.

• A) a depreciation; will lead to an appreciation
• B) a depreciation; also will lead to a depreciation
• C) an appreciation; also will lead to an appreciation
• D) an appreciation; will lead to a depreciation

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Definitions:

Contingency Variable

An external variable whose variation can influence the relationship between other variables in a study or model.

Task-oriented Leaders

Leaders who focus primarily on the completion of tasks and objectives rather than on the personal needs of team members.

Situational Favourableness

The extent to which a particular situation is perceived as beneficial, opportune, or advantageous.

Situational Favourableness

The degree to which a particular situation or environment is advantageous or beneficial to the goals of a person or group.