One Lesson Policymakers Have Learned, and Which Was Evident from Japan's

question 17

Multiple Choice

One lesson policymakers have learned, and which was evident from Japan's experience in 2002, is:

• A) an intervention in the foreign exchange market will not work unless accompanied by a change in the policy interest rate.
• B) an intervention in the foreign exchange market is almost always effective if done on a regular basis.
• C) in order for foreign exchange interventions to work, they must be frequent and expected.
• D) for an intervention in the foreign exchange market to work, the interest rate must be held constant by the central bank.

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Definitions:

Naturalistic Observation

A research paradigm in which an observer observes participants in familiar everyday contexts while ideally remaining as unobtrusive as possible.

Experiment

A test of a scientific theory in which the researcher manipulates the independent variable.

Experiment

A method of research in the sciences or social sciences in which a controlled procedure is conducted to test a hypothesis, observe effects, and establish cause and effect relationships.

Cause-and-Effect Relationships

A connection between two events where one event (the cause) makes another event happen (the effect), indicating a direct association.