Relative Purchasing-Power Parity Theory Postulates That the Equilibrium Exchange Rate

question 42

True/False

Relative purchasing-power parity theory postulates that the equilibrium exchange rate is equal to the ratio of the price levels in the two nations.

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Definitions:

Positive Reinforcement

A reinforcement procedure in which a response is followed by the presentation of, or increase in intensity of, a reinforcing stimulus; as a result, the response becomes stronger or more likely to occur.

Primary Reinforcer

A stimulus that is naturally rewarding, such as food, water, or relief from pain.

Secondary Reinforcer

A stimulus that has become reinforcing through its association with a primary reinforcer, such as money being valued for its ability to purchase food or other basic needs.

Positive Reinforcer

A stimulus that, when presented after a behavior, increases the likelihood of that behavior occurring again.