Concerning a Currency Depreciation, the Elasticity Approach and the Absorption

question 54

Multiple Choice

Concerning a currency depreciation, the elasticity approach and the absorption approach are theories that deal with the impact of the depreciation on

• A) exports and imports of goods and services.
• B) the domestic supply and demand of money.
• C) capital inflows and capital outflows.
• D) rates of inflation and rates of deflation.

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Definitions:

Capital

Financial assets or the value of assets owned by a business, used in producing goods or services or invested to generate income.