In a Graph Illustrating the Determination of the Exchange Rate

question 59

Multiple Choice

In a graph illustrating the determination of the exchange rate that has the yen-dollar exchange rate on the vertical axis and the expected rate of return, in dollars terms, from investing in a U.S. or Japanese asset on the horizontal axis, the line representing R, the return on a U.S. asset in dollar terms, is

• A)a vertical line.
• B)a horizontal line.
• C)an upward-sloping line.
• D)a downward-sloping line.

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Definitions:

Frustration Aggression Hypothesis

A psychological theory stating that frustration often leads to aggressive behavior as an expression of the frustration.

Catharsis

The process of releasing, and thereby providing relief from, strong or repressed emotions.

Catharsis

The method of discharging intense or pent-up emotions to attain a state of relief.