Which of the Following Approaches to Exchange Rate Determination Postulates

question 35

Multiple Choice

Which of the following approaches to exchange rate determination postulates that the exchange rate is determined in the process of equilibrating the total demand and supply of the national currency in each nation?

• A)The purchasing-power parity theory
• B)The monetary model of exchange rates
• C)The trade approach to exchange rates
• D)The elasticities approach to exchange rates

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Definitions:

Low-context Cultures

Cultures where people communicate explicitly, relying less on context, nonverbal cues, and background knowledge to understand each other.

Direct Approach

A straightforward method of communication, where the main point is presented at the beginning.

Indirect Approach

A communication technique where the main point is not immediately presented, instead leading through auxiliary details or reasoning before revealing the primary message.

Bias

A tendency to hold prejudiced views or unfair favoritism toward something or someone.