Monetary Policy Autonomy and Automatic Trade Balance Adjustments Are the Two

question 5

True/False

Monetary policy autonomy and automatic trade balance adjustments are the two main elements of the case for fixed exchange rates.

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Definitions:

Stimulus

Anything that can elicit a physical or behavioral response in an organism.

Weber's Law

A principle in psychology that states the smallest noticeable difference in stimulus intensity is proportional to the intensity of the original stimulus, making it a relative measure rather than an absolute one.

Discernible

Easily recognized or distinguishable; capable of being seen or understood through observation or clear evidence.

Weber's Law

A principle stating that the change in a stimulus that will be just noticeable is a constant ratio of the original stimulus.