Critics of the Balance of Payments Approach to Exchange Rate

question 32

Multiple Choice

Critics of the balance of payments approach to exchange rate determination point to the emphasis on ________ of currency and capital rather than ________ of money or financial assets.

• A) flows; stocks
• B) stocks; flows
• C) import; export
• D) export; import

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Definitions:

Proximity

The physical or psychological closeness between people, which often influences social relationships and interactions.

Gestalt Principle

A theory in psychology that proposes objects are viewed holistically, emphasizing the whole of anything is greater than its parts.

Proximity

The physical or psychological closeness between people or objects, often influencing relationships and interactions.

Continuation

The act of proceeding or carrying on with an activity or process without interruption.