The Following Example Supports Which Extension to the Monetary Approach

question 22

Multiple Choice

The following example supports which extension to the Monetary Approach to Exchange rates: The cost of holding a U.S.dollar rises relative to the cost of holding U.K.Pounds.The demand shifts away from dollars to Pounds.

• A) General equilibrium approach
• B) Trade balance approach
• C) Overshooting approach
• D) Currency substitution approach

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