The Following Example Supports Which Extension to the Monetary Approach

question 46

Multiple Choice

The following example supports which extension to the Monetary Approach to Exchange rates: Due to changes in the pricing of risk premiums,investors adjust holdings of foreign assets causing an appreciation of domestic currency.

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

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Definitions:

Adults

Individuals who have reached the age of majority, legally recognized as capable of entering into binding contracts and being responsible for their actions.

Illegal Contract

A contract that is void because it involves the performance of an unlawful act.

Prostitution

A practice of engaging in sexual activities in exchange for payment or other benefits.

Cocaine

A powerful stimulant drug derived from the leaves of the coca plant, classified as a narcotic.