The Credibility Theory of the EMS Implies in Effect That

question 40

Multiple Choice

The credibility theory of the EMS implies in effect that the political costs of violating international exchange rate agreements

• A) cannot restrain governments from depreciating their currency to gain the short-term advantage of an economic boom at the long-term cost of higher inflation.
• B) can restrain governments from depreciating their currency to gain the short-term advantage of an economic boom at the long-term cost of higher inflation.
• C) cannot restrain governments from depreciating their currency in the short run.
• D) cannot restrain governments from depreciating their currency in the long run.
• E) cannot restrain governments from depreciating their currency to gain the long-term advantage of an economic boom.

---

Definitions:

Adaptation-level Phenomenon

The tendency to judge new stimuli and experiences by comparing them to our past experiences, leading to a normalization of experiences.

Learned Helplessness

A condition in which a person suffers from a sense of powerlessness, arising from a traumatic event or persistent failure to succeed, leading to decreased motivation and action.

Biofeedback

A technique that trains people to improve their health by controlling certain bodily processes that normally happen involuntarily, such as heart rate.

Academic Self-concept

An individual's perception and evaluation of their academic abilities and competencies.