CFA Practice Question

There are 253 practice questions for this study session.

CFA Practice Question

Which model claims that short-term prices are sticky?
A. The monetary approach.
B. The Dornbusch overshooting model.
C. The portfolio balance model.
Explanation: The model assumes that prices are fixed in the short run and they adjust slowly towards the long run equilibrium. The result is the nominal exchange rate can "overshoot" its long term value.

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