The PPP Theory Tells Us That a Country with a High

question 94

Multiple Choice

The PPP theory tells us that a country with a high inflation rate will see:

• A) a depreciation in its currency exchange rate
• B) an appreciation in its currency exchange rate
• C) no change in its currency exchange rate as a result of the inflation rate
• D) economic stability as a result of high inflation
• E) price rises to match neighbouring country prices

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Definitions:

Stimuli

Refers to physical or environmental factors that can provoke a response or reaction in a living organism.

Reinforced

Strengthened or supported, often in the context of materials or structures, but also applicable to behaviors in psychology.

Positive Reinforcement

The presentation of a stimulus following a given behavior in order to increase the frequency of that behavior.

Operant Conditioning

A learning process through which the strength of a behavior is modified by reinforcement or punishment, a principle established by B.F. Skinner.