The effect of currency depreciation on the purchasing power of money balances and the resulting impact on domestic expenditures is emphasized by the:
A) Absorption approach
B) Monetary approach
C) Fiscal approach
D) Elasticity approach

Question

Quizplus · Accepted Answer

The monetary approach emphasizes the impact of currency depreciation on the purchasing power of money balances, affecting domestic expenditures through changes in the money supply and demand.

The Effect of Currency Depreciation on the Purchasing Power of Money