All Else Being Constant,a Currency Should _______ If There Is

question 13

Multiple Choice

All else being constant,a currency should _______ if there is _______ in a country's inflationary expectations,relative to those in other countries.

• A) depreciate; an increase
• B) depreciate; a decline
• C) appreciate; increase
• D) appreciate; no change

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Definitions:

Weber's Law

A principle in psychology that states the smallest change in a stimulus, such as weight or brightness, that can be detected is a constant proportion of the stimulus level.

Absolute Threshold

The minimum stimulus intensity required to detect a stimulus at least half the time.

Sensory Adaptation

The mechanism by which sensory receptors reduce their sensitivity to sustained stimuli as time progresses.

Signal Detection Theory

A psychological theory that describes how individuals decide on the presence or absence of a stimulus under conditions of uncertainty.