Between 1998 and the End of 2000, the U

question 22

Multiple Choice

Between 1998 and the end of 2000, the U.S. ran a large trade deficit; this should have caused the dollar to depreciate against foreign currencies but instead the dollar appreciated. The main reason for this is:

• A) foreign exchange markets are slow to react.
• B) the supply of dollars actually fell.
• C) the dramatic increase in U.S. stock prices attracted a lot of foreign capital increasing the demand for dollars by more than the increase in the supply of dollars.
• D) the demand for dollars shifted left by more than the supply of dollars shifted right.

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Definitions:

Amygdala

A part of the brain involved in emotion regulation, and the processing of fear and pleasure responses.

Autonomic Arousal

This involves the automatic activation of physiological responses in the body, such as heart rate and sweating, typically in reaction to stress or perceived threats.

Physiological Arousal

The condition of having one's body in a heightened state of alertness and physical readiness, often as a response to stimuli.

Cognitive Experience

The processes involved in acquisition, organization, and use of knowledge, including perception, memory, and reasoning.