The monetary approach basically looks at as the fundamental variable affecting exchange rates.

In the United States, of the following decades inflation was highest during the ________.,

A) 1970s B) 1990s C) 1960s D) 2000s

Ceteris paribus, with a fixed exchange rate, if Americans decide to buy more Japanese-made television sets, this causes a market ________ of Japanese currency and creates a balance-of-payments ________ for the United States.

A. shortage; surplus B. surplus; surplus C. surplus; deficit D. shortage; deficit