The traditional view of currency values focuses on:
A)aggregate supply and demand in all transactions in which the currency is used.
B)the current account in a country's balance of payments.
C)how long the currency has been in existence and the long term trends in the value of the currency.
D)volatility of the currency on international currency markets.

Question

Quizplus · Accepted Answer

The traditional view of currency values focuses on the current account in a country's balance of payments, which measures the inflow and outflow of goods, services, and investments. A large current account surplus generally leads to a stronger currency value, while a large deficit leads to a weaker currency value. Therefore, option B is the best choice.

The Traditional View of Currency Values Focuses On