Use the Following to Answer Questions

question 8

Multiple Choice

Use the following to answer questions .
Exhibit: Foreign Exchange Market
-(Exhibit: Foreign Exchange Market) The supply of dollars curve slopes upwards because

• A) a higher exchange rate tends to make foreign goods and services more expensive for U.S. buyers, thereby raising the price of foreign currency in the foreign exchange market.
• B) a higher exchange rate tends to make foreign goods and services cheaper to U.S. buyers, thereby generating a higher quantity of dollars in the foreign exchange market.
• C) a lower exchange rate tends to decrease U.S. exports, thereby generating a lower quantity of dollars in the foreign exchange market.
• D) a lower exchange rate tends to increase U.S. imports, thereby raising the price of foreign currency in the foreign exchange market.

Assess the implications of the crowding-out effect on economic activity.

Grasp the concept of inflationary and recessionary gaps and how fiscal policy can adjust them.

Understand the various components and purposes of financial and operating budgets.

Distinguish between different types of budgets within a master budget.

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Definitions:

Classical Conditioning

A learning process in which an innate response to a potent stimulus becomes transferred to a previously neutral stimulus.

Latent Learning

A form of learning that occurs without any obvious reinforcement of the behavior or associations that are learned, often becoming apparent when there is an incentive to demonstrate it.

Instinctive Drift

Instinctive drift refers to the tendency of an animal to revert to instinctual behaviors even after learning new behaviors via operant conditioning.

Instinctive Drift

The phenomenon where established habits learned through operant conditioning start to revert to innate behavioral patterns.