Use the Following to Answer Questions

question 414

Multiple Choice

Use the following to answer questions:
Suppose that initially the nominal exchange rate was 40 rupees per dollar,but it is now 50 rupees per dollar.
-(Scenario: Exchange Rate between Canada and India) Refer to Scenario: Exchange Rate between Canada and India.If the nominal exchange rate is 50 rupees per dollar and the inflation rate in India is 25%,while the aggregate price level has remained unchanged in Canada,the real exchange rate between the Canadian dollar and the Indian rupee:

• A) remains unchanged at 40.
• B) remains unchanged at 50.
• C) increases from 40 to 50.
• D) increases by more than 25%.

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Definitions:

Aversive Conditioning

A method of behavior modification in which unpleasant stimuli are associated with undesirable behaviors to reduce or eliminate those behaviors.

Classical Conditioning

A learning process in which a neutral stimulus becomes associated with a meaningful stimulus and acquires the capacity to elicit similar responses.

Desensitization

Desensitization is a psychological process through which an individual is made less likely to feel extreme responses towards a stimulus, often used in the treatment of phobias and anxieties.

Systematic Desensitization

A method in behavioral therapy aimed at decreasing fear and anxiety by slowly introducing the individual to the object or situation that causes their fear.