Flexible Exchange Rates Exist When

question 55

Multiple Choice

Flexible exchange rates exist when

• A) no one knows what the true value of a currency is.
• B) governments and central banks spend foreign reserves to prop up an exchange rate at a certain level.
• C) exchange rates are determined by forces of supply and demand.
• D) speculators bet that a currency will soon be depreciated.

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Definitions:

Proximal Stimuli

The patterns of stimuli from objects and events that actually reach your senses (eyes, ears, skin, etc.), influencing perception.

Distal Stimuli

External objects and events in the environment that provide the basis for the perception of the world.

Association

The process by which ideas or mental states are linked together in the mind, or the relationship between things based on experience or co-occurrence.

Nativist Belief

A perspective that much of human behavior and cognition is innate, heavily influenced by genetic factors.