Under a Fixed Exchange Rate System,a Real Interest Rate Corresponding

question 24

Multiple Choice

Under a fixed exchange rate system,a real interest rate corresponding to the upward-sloping portion of the NCF curve reflects the fact that a central bank ________,and the real interest rate corresponding to the horizontal portion of the NCF curve reflects the fact that a central bank ________.

• A) can always supply more domestic currency; can always meet the demand for foreign currency
• B) can always supply more domestic currency; is limited in meeting the demand for foreign currency
• C) is limited in meeting the demand for domestic currency; can always meet the demand for foreign currency
• D) is limited in meeting the demand for domestic currency; is limited in meeting the demand for foreign currency

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Definitions:

Law Of Effect

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

Operant Conditioning

A learning process through which the strength of a behavior is modified by reinforcement or punishment.

Operant Conditioning

A learning process through which behavior is shaped and maintained by its consequences, including reinforcements and punishments.

Extinction

Extinction in behavioral psychology refers to the gradual weakening and disappearance of a conditioned response when the reinforcement is no longer provided.