All of the Following Are True Regarding Flexible Exchange Rates

question 41

Multiple Choice

All of the following are true regarding flexible exchange rates except

• A)Speculators typically push exchange rates away from the long-term equilibrium.
• B)The quantity of foreign exchange demanded equals the quantity supplied.
• C)Exchange rate movements alter relative prices and may disrupt import and export flows.
• D)Some people are hurt while others are helped by exchange rate movements.

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Definitions:

Shaping

A method in behavioral psychology for teaching complex behaviors by rewarding closer and closer approximations of the desired behavior.

Spontaneous Recovery

In learning theory, the reappearance of a conditioned response after a period of lessened response.

Extinct Response

The diminishing or disappearance of a conditioned response when the reinforcement is no longer provided.

Stimulus Generalization

The tendency for the conditioned response to be triggered by stimuli that are similar but not identical to the original conditioned stimulus.