The Exchange Rate Can Be Very Volatile, Yet the Quantity

question 44

Multiple Choice

The exchange rate can be very volatile, yet the quantity of dollars traded might not change much because

• A)supply of dollars and the demand for dollars often change in opposite directions.
• B)both the demand curve for dollars and the supply curve of dollars are horizontal.
• C)the Fed is constantly intervening by buying and selling dollars.
• D)supply of dollars and the demand for dollars often change in the same directions.
• E)there is only limited quantity of dollars in the foreign exchange market.

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Definitions:

Defense Mechanism

Unconscious psychological strategies employed to manage stress, anxiety, or uncomfortable feelings.

Repressed Urges

Desires or impulses that have been pushed into the unconscious because they are considered unacceptable or too painful to acknowledge consciously.

Oedipus Complex

A psychoanalytic theory that describes a child's feelings of desire for the opposite-sex parent and jealousy and competitiveness with the same-sex parent.

Developmental Process

The series of changes or growth that an organism undergoes over its lifespan, from conception to death.