Under a System of Flexible Exchange Rates,the Currency of a Country

question 16

Multiple Choice

Under a system of flexible exchange rates,the currency of a country experiencing a balance of payments deficit would (relative to other currencies)

• A) appreciate, causing an increase in net exports.
• B) appreciate, causing a decrease in net exports.
• C) depreciate, causing a decrease in net exports.
• D) depreciate, causing an increase in net exports.
• E) depreciate or appreciate, depending on supply and demand.

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Definitions:

Instrumentality

The perception that a certain level of performance will lead to the attainment of a desired outcome.

High Power Need

A psychological term describing a person's desire to exert control or influence over others.

McClelland

A reference to David McClelland, an American psychologist known for his work on motivation needs theory, including the needs for achievement, affiliation, and power.

Behavior Modification

The use of empirical and operant conditioning techniques to change or adjust unhealthy or undesirable behaviors.