Which of the following is not appropriate,if we live in a world of fixed exchange rates?
A)monetary approach to the exchange rate
B)elasticities approach
C)monetary approach to the BOP
D)absorption approach

Question

Quizplus · Accepted Answer

The monetary approach to the exchange rate assumes flexible exchange rates to determine the value of currencies based on supply and demand. In a fixed exchange rate system, central banks adjust their reserves and interest rates to maintain the peg, making the monetary approach less applicable.

Which of the Following Is Not Appropriate,if We Live in a World