Which of the following is true with respect to the monetary approach to the balance of payments?
A)it views the balance of payments as an essentially monetary phenomenon
B)a balance of payments deficit results from an excess demand of money in the nation
C)a balance of payments surplus results from an excess supply of money
D)balance of payments disequilibrium are not automatically corrected in the long run

Question

Quizplus · Accepted Answer

The monetary approach to the balance of payments views it as primarily a monetary phenomenon, emphasizing the role of the money supply, money demand, and how imbalances are corrected by changes in the domestic price level and exchange rates.

Which of the Following Is True with Respect to the Monetary