Which of the following statements is the most accurate? In general,
A) the monetary approach to the exchange rate is a long run theory.
B) the monetary approach to the exchange rate is a short run theory.
C) the monetary approach to the exchange rate is both a short and long run theory.
D) the monetary approach to the exchange rate neither long run nor short run theory.
E) the monetary approach to the exchange rate is considered less practical than the law of one price.

Question

Quizplus · Accepted Answer

The monetary approach to the exchange rate is primarily a long-run theory, as it focuses on the relationship between money supply, price levels, and exchange rates over time.

Which of the Following Statements Is the Most Accurate? in General