If We Set the Real Effective Exchange Rate Index Between

question 62

Multiple Choice

If we set the real effective exchange rate index between Canada and the United States equal to 100 in 1998, and find that the U.S. dollar has risen to a value of 112.6, then from a competitive perspective the U.S. dollar is:

• A) overvalued.
• B) undervalued.
• C) very competitive.
• D) There is not enough information to answer this question.

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Definitions:

Punishment

A consequence designed to reduce or eliminate a behavior through negative or unpleasant outcomes.

Operant Technique

A method in behavioral psychology involving reinforcements or punishments to influence the frequency of a behavior.

Positive Reinforcement

The addition of a rewarding stimulus following a desired behavior, increasing the likelihood of its future occurrence.

Punishment

The imposition of an undesirable or unpleasant outcome upon a group or individual in response to a behavior deemed unacceptable or harmful.