If the Rate of Inflation Is Suddenly Expected to Be

question 30

Multiple Choice

If the rate of inflation is suddenly expected to be 8% higher than previously anticipated in the US than in the UK,the dollar should immediately depreciate by what percent with respect to the pound in order to keep prices equal in the US and the UK?

• A)8%
• B)10%
• C)6%
• D)9%

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Definitions:

Conservation

In cognitive psychology, Piaget's principle that children learn that quantity does not change with physical rearrangement or appearance of objects.

Classification

The systematic arrangement of entities in a structured form, usually based on common characteristics or attributes.

Preoperational Thought

Describes one of Piaget's stages of cognitive development, typically occurring from age 2 to 7, marked by symbolic thinking, egocentrism, and a lack of logical reasoning.

Intuitive Thought

The ability to understand or know something without conscious reasoning or direct evidence.