In the Monetary Approach to the Balance of Payments, Under

question 23

Multiple Choice

In the monetary approach to the balance of payments, under flexible exchange rates, an Increase in the proportion of income that people in country A wish to hold as money Would, other things equal, lead to an __________ in country A's balance of payments and Therefore to __________ of A's currency in the foreign exchange markets.

• A) incipient surplus; a depreciation
• B) incipient surplus; an appreciation
• C) incipient deficit; a depreciation
• D) incipient deficit; an appreciation

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Definitions:

Henry Ford

An American industrialist and founder of the Ford Motor Company who revolutionized factory production with his assembly line methods, significantly impacting the automobile industry.

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A resolution reached through direct negotiations between parties, often used in legal disputes, conflicts, or diplomatic disagreements.

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Refers to a country or ethnic group of Slavic origin that acts as a cooperative partner or supporter to another entity in political or military endeavours.

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