If Over the Next Six Months Inflation Is Higher in the U.S.than

question 56

Multiple Choice

If over the next six months inflation is higher in the U.S.than in foreign countries,then according to purchasing-power parity

• A)only the nominal exchange rate depreciates.
• B)both the real and nominal exchange rate appreciate.
• C)both the real and nominal exchange rate depreciate.
• D)only the real exchange rate appreciates.

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Definitions:

Piaget

Jean Piaget, a Swiss psychologist renowned for his work in child development and his theory of cognitive stages.

Situation

Refers to a set of circumstances or a scenario in which individuals find themselves, which can affect their actions and decisions.

Irreversibility

Piaget’s term for a preoperational child’s failure to understand that an operation can go in two or more directions.

Clay

A natural, earthy material composed of minerals with fine particles, used in making pottery, bricks, and sculptures.