If the Purchasing Power of a Dollar Is Less Than

question 195

Multiple Choice

If the purchasing power of a dollar is less than the purchasing power of the euro,purchasing power parity would predict that

• A)in the short run,exchange rates will move to equalize the purchasing power of the dollar and the euro.
• B)in the long run,exchange rates will move to equalize the purchasing power of the dollar and the euro.
• C)in the long run,interest rates will move to equalize the purchasing power of the dollar and the euro.
• D)in the short run,interest rates will move to equalize the purchasing power of the dollar and the euro.

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Definitions:

Conditioned Response

A response that is acquired due to the association of a neutral stimulus with an unconditioned stimulus, leading to a conditioned reaction.

Behavioral Contrast

A phenomenon where the rate of response to a stimulus changes when the conditions of reinforcement for another stimulus are altered.

Eyeblink Conditioning

When a conditioned stimulus (CS) becomes able to elicit a conditioned eyeblink as a result of being paired with a puff of air or a brief electrical shock below the eye.

Extinction Procedure

A process in conditioning where a conditioned response decreases in frequency and eventually disappears when the conditioned stimulus is presented without the unconditioned stimulus.