- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 8. Currency Exchange Rates: Understanding Equilibrium Value
- Subject 3. A Long-Term Framework for Exchange Rates
CFA Practice Question
Which approach focuses on the flows needed to achieve long-term equilibrium in the capital account?
A. Macroeconomic balance approach
B. External sustainability approach.
C. Reduced-form econometric model.
Explanation: It focuses on the stock of net external debt.
User Contributed Comments 2
| User | Comment |
|---|---|
| janis36 | Macroeconomic balance approach focuses on reaching the equilibrium in current account. Current account is the mirror image of capital account, so I assumed that answer A is correct. |
| jiachenw | Macroeconomic balance approach is for current account, while external sustainability approach is for capital account. |