How can currency depreciation induced changes in household money balances promote payments equilibrium?
A. The monetary approach suggests currency devaluation affects the domestic price level and the purchasing power of money balances, which leads to changes in domestic expenditures and the level of imports.
B. The elasticities approach suggests currency devaluation affects the domestic price level and the purchasing power of money balances, which leads to changes in domestic expenditures and the level of imports.
C. The absorption approach suggests currency devaluation affects the domestic price level and the purchasing power of money balances, which leads to changes in domestic expenditures and the level of imports.
D. The monetary approach suggests currency devaluation affects the domestic price level and the purchasing power of money balances, which leads to changes in exchange rates.
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