When the Rate of Appreciation of the Nominal Exchange Rate

question 69

Multiple Choice

When the rate of appreciation of the nominal exchange rate equals the foreign inflation rate minus the domestic inflation rate,we say there is

• A)relative purchasing power parity.
• B)purchasing power parity.
• C)a Phillips curve.
• D)an aggregate supply shock.

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Definitions:

Alarm Reaction

The initial stage in the stress response where the body readies itself for fight or flight, part of the General Adaptation Syndrome.

Fight-Or-Flight Reaction

A physiological response to a perceived harmful event, attack, or threat to survival.

Hans Selye

A Hungarian-Canadian endocrinologist known for his research on the physiological responses of the body to stress and the development of the general adaptation syndrome model.

Walter Cannon

A physiologist known for coining the term "fight or flight response" and his work on homeostasis.