The Most Important Single Factor in Determining the Exchange Rate

question 75

Multiple Choice

The most important single factor in determining the exchange rate in the short run is

• A)inflation differentials.
• B)interest rate differentials.
• C)monetary growth differentials.
• D)price differentials.

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Definitions:

Neutral Stimulus

A stimulus that initially produces no specific response other than focusing attention, until it is associated with an unconditioned stimulus.

Organism's Responding

The manner in which an organism reacts to stimuli or changes in its environment.

Conditioned Response

A learned reaction to a previously neutral stimulus that occurs as a result of conditioning, typically demonstrated in Pavlov’s dog experiment.

Unconditioned Response

A spontaneous, innate response to a trigger that happens without any previous training or conditioning.