In Countries Where Inflation Is Expected to Be High, Interest

question 73

Multiple Choice

In countries where inflation is expected to be high, interest rates also will be high, because investors want compensation for the decline in the value of their money. This relationship is referred to as the

• A) purchasing power parity puzzle.
• B) lead strategy.
• C) Fisher effect.
• D) bandwagon effect.
• E) international Fisher effect.

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Definitions:

New Ecological Paradigm

Emphasizes that modern industrial society is beginning to exceed the limits of the environment.

Ecosystem Processes

The natural cycles and exchanges of energy and nutrients that sustain environments and the organisms within them.

Sustainable Development

The belief that economic development can occur without damaging the environment.

Capitalism

An economic system characterized by private ownership of the means of production, where goods and services are produced for profit in a competitive market.