The Monetary Approach Makes the General Prediction That

question 32

Multiple Choice

The monetary approach makes the general prediction that

• A) the exchange rate, which is the relative price of American and European money, is fully determined in the long run by the relative supplies of those monies.
• B) the exchange rate, which is the relative price of American and European money, is fully determined in the short run by the relative supplies of those monies and the relative demands for them.
• C) the exchange rate, which is the relative price of American and European money, is fully determined in the short run and long run by the relative supplies of those monies and the relative demands for them.
• D) the exchange rate, which is the relative price of American and European money, is fully determined in the long run by the relative supplies of those monies and the relative demands for them.
• E) the money supply in the U.S. will adjust to European monetary equilibrium.

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Definitions:

Conditioned Stimulus

In classical conditioning, a previously neutral stimulus that, after being associated with an unconditioned stimulus, comes to elicit a conditioned response.

Snake Phobia

An intense, irrational fear of snakes, which can cause emotional and physical reactions even in the absence of real danger.

Classical Conditioning

The act of learning through establishing a relationship between a stimulus that is environmentally based and another that occurs spontaneously in nature.

Environmental Cues

External triggers or signals that can influence behavior and perception without conscious awareness.