The portfolio balance approach:
A)can be regarded as an extension of the monetary approach
B)deals with money and other domestic and foreign financial assets
C)can more readily be extended than the monetary approach to deals with the real sector
D)all of the above

Question

Quizplus · Accepted Answer

The portfolio balance approach is an extension of the monetary approach and deals with money and other domestic and foreign financial assets. Additionally, it can more readily be extended than the monetary approach to deal with the real sector. Therefore, all of the above options are correct.

The Portfolio Balance Approach