Assume That Interest Rates in the United States and Britain

question 177

Multiple Choice

Assume that interest rates in the United States and Britain are the same.If a U.S.resident anticipates that the exchange value of the dollar is going to appreciate against the pound,she should:

• A) Borrow needed funds from British banks rather than U.S.banks
• B) Borrow needed funds from U.S.banks rather than British banks
• C) Convert U.S.dollars into British pounds
• D) Any of the above

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Definitions:

Law Of Effect

A principle in psychology stating that behaviors followed by positive outcomes are likely to be repeated, whereas behaviors followed by negative outcomes are less likely to be repeated.

Variable-Interval Schedule

A reinforcement schedule in operant conditioning where a response is rewarded after an unpredictable amount of time has passed.

Counterconditioned

The process of changing a previously undesirable response to a stimulus into a desirable one through conditioning.

Negative Reinforcement

A behavioral concept where the removal of an unfavorable outcome or stimulus strengthens a particular behavior.