According to the Monetary Approach of the Balance of Payments

question 3

Multiple Choice

According to the monetary approach of the balance of payments MABP,an increase in U.S.money supply growth will cause the U.S.foreign reserves :

• A) to fall, as foreign central bank selling its currency and buying U.S. dollars.
• B) to fall, as foreign central bank selling U.S. dollars and buying its currency.
• C) to rise, as foreign central bank selling its currency and buying U.S. dollars.
• D) to rise, as foreign central bank selling U.S. dollars and buying its currency.

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Definitions:

Raw Materials

Basic materials used in the production process to make goods and products, typically unprocessed or minimally processed.

Finished Product

A final good ready for sale after undergoing all stages of production.

Required Production

The quantity of goods or services that a company needs to produce within a specific timeframe to meet the demands of its customers.

Material Inventories

Stocks of raw materials, work-in-progress, and finished goods that are held for use in production or sale in the future.