The Russian Ruble crisis of 1998 was a complex combination of speculative pressures best explained by ________ to exchange rate determination.
A) parity conditions approach
B) asset approach
C) balance of payments approach
D) PPP approach

Question

Quizplus · Accepted Answer

The asset approach emphasizes the role of capital flows in exchange rate determination, including speculation and changes in perceptions of risk. This approach is particularly relevant to understanding the Russian Ruble crisis, as it was fueled by large capital outflows and a loss of confidence in the Russian economy.

The Russian Ruble Crisis of 1998 Was a Complex Combination