Relative Purchasing Power Parity Occurs When

question 6

Multiple Choice

Relative purchasing power parity occurs when

• A)purchasing power parity holds between every two countries.
• B)purchasing power parity only holds in recessions.
• C)the nominal exchange rate is constant.
• D)the real exchange rate is constant.

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Definitions:

Negative Punishment

The removal of a stimulus to decrease the probability that a behavior will recur.

Positive Punishment

Adding an unpleasant stimulus to decrease the probability of a behavior's occurrence.

Negative Reinforcement

involves the removal of an unfavorable event or outcome after the display of a behavior, which in turn increases the likelihood of that behavior in the future.

Positive Reinforcement

The addition of a stimulus to increase the probability that a behavior will be repeated.