According to the Doctrine of Purchasing-Power Parity,which of the Following

question 23

Multiple Choice

According to the doctrine of purchasing-power parity,which of the following should depreciate if over the next year the inflation rate is higher in the U.S.than in the Euro area?

• A)both the U.S.real exchange rate and the U.S.nominal exchange rate
• B)the U.S.real exchange rate,but not the U.S.nominal exchange rate
• C)the U.S.nominal exchange rate,but not the U.S.real exchange rate
• D)neither the U.S.nominal exchange rate nor the U.S.real exchange rate

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Definitions:

Extrinsic Motivation

Motivation driven by external rewards such as money, fame, grades, and praise, rather than for the sake of the activity itself.

Competent

Having the necessary ability, knowledge, or skill to do something successfully or efficiently.

William McDougall

A psychologist known for his work on social psychology and introducing the concept of the "group mind" and the theory of instincts.

Human Instincts

Innate, biologically determined and genetically programmed behaviors that are essential for the survival and reproduction of humans.