Deviations from the International Currency Parity Relationships May Occur Because

question 55

Multiple Choice

Deviations from the international currency parity relationships may occur because of

• A)free capital movements across national boundaries.
• B)barriers to cross-border financial flows.
• C)perfect rationality of market participants.
• D)differences in each country's productive capacity.
• E)Basel capital regulations.

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Definitions:

Just-World Phenomenon

The cognitive bias that a person's actions are inherently inclined to bring morally fair and fitting consequences to that individual, to the end of all noble actions are rewarded and evil actions are punished.

Scapegoating

The practice of singling out any party for unmerited negative treatment or blame.

Other-Race Effect

The tendency to more easily recognize faces of one's own race, compared to faces of other races, often attributed to social and cognitive factors.

Aggression

Behavior aimed at causing harm or pain to another being, which can be physical or verbal.