According to the Monetary Approach,when a Monetary Disequilibrium Exists,either ____________

question 8

Multiple Choice

According to the monetary approach,when a monetary disequilibrium exists,either ____________ or _____________ has to adjust depending on the type of exchange rate system.

• A) the balance of payments; domestic production
• B) the balance of payments; exchange rate value
• C) domestic production; exchange rate value
• D) domestic production; foreign inflation rate

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Definitions:

Relevant Range

The relevant range is a level of activity within which assumptions about variable and fixed cost behaviors are valid, used for budgeting and forecasting.

Activity Level

A measure of the volume of work or operations in a company, influencing variable costs and often used for budgeting and performance evaluation.

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, insurance, and salaries of permanent staff.

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behavior are valid.