If Nations Erect Tariffs and Quotas to Restrict Trade, What

question 138

Multiple Choice

If nations erect tariffs and quotas to restrict trade, what is likely to happen to predicted values of currencies drawn from the purchasing power parity theory?

• A)They will be understated for tariffs and overstated for quotas.
• B)They will be overstated for tariffs and understated for quotas.
• C)They will be the correct values.
• D)They will be incorrect.

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Definitions:

Work Effort

The amount of physical or mental energy put into a job or task to achieve a certain output or performance level.

Compensation

The total amount of the monetary and non-monetary pay provided to an employee by an employer in return for work performed.

Motivational Process

The psychological mechanisms that direct an individual’s intensity, direction, and persistence of effort towards attaining a goal.

Rewards Or Punishments

The use of positive reinforcement or penalties to influence behavior.