The Credibility Theory of the EMS Implies in Effect That

question 24

Multiple Choice

The credibility theory of the EMS implies in effect that the political costs of violating international exchange rate agreements

• A) cannot restrain governments from depreciating their currency.
• B) can restrain governments from depreciating their currency.
• C) cannot restrain governments from depreciating their currency in the short run.
• D) cannot restrain governments from depreciating their currency in the long run.
• E) can control the political policies of member nations.

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Definitions:

Punishment

The imposition of a penalty as retribution for an offense or wrongdoing.

Contingency

Refers to a future event or circumstance that is possible but cannot be predicted with certainty.

Modifying Behavior

The process of changing individual behaviors through various techniques and strategies, often used in organizational and therapeutic contexts.

Operant Conditioning

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