The _____ approach to exchange rates emphasizes the importance of the supply and demand for money as a key to understanding the determinants of exchange rates.
A)purchasing-power-parity
B)asset market
C)monetary
D)balance of payments

Question

Quizplus · Accepted Answer

The monetary approach to exchange rates focuses on the supply and demand for money as the primary factors influencing exchange rates, suggesting that changes in a country's money supply can directly affect its currency's value in the foreign exchange market.

The _____ Approach to Exchange Rates Emphasizes the Importance of the Supply