If the Term Structure of Interest Rates in Two Countries

question 6

Multiple Choice

If the term structure of interest rates in two countries differ,the differences reflect

• A)expected price levels over time.
• B)expected GDP differences.
• C)the absence of covered interest arbitrage.
• D)expected exchange rate changes over time.

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Definitions:

Fixed-Interval Schedule

A reinforcement schedule where a response is rewarded only after a fixed amount of time has elapsed.

Operant Conditioning

A training technique in which the likelihood of a behavior is changed through the use of incentives or consequences.

Extinction

In psychology, the gradual weakening and eventual disappearance of a learned response when it is no longer reinforced.

Partial-Reinforcement Schedule

In operant conditioning, a strategy in which a behavior is reinforced intermittently, often resulting in more resistant and persistent responses.