If a Country Experiences an Increase in Interest Rates Relative

question 8

Multiple Choice

If a country experiences an increase in interest rates relative to U.S. interest rates, the inflow of U.S. funds to purchase its securities should ____, the outflow of its funds to purchase U.S. securities should ____, and there is ____ pressure on its currency's equilibrium value.

• A) increase; decrease; downward
• B) decrease; increase; upward
• C) increase; decrease; upward
• D) decrease; increase; downward
• E) increase; increase; upward

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Definitions:

Discriminative Stimulus

A stimulus that signals when a particular response is likely to be followed by a certain type of consequence.

Extinguished Stimulus

A stimulus that previously elicited a response but no longer does so after the process of extinction in conditioning.

Neutral Stimulus

In classical conditioning, a stimulus that initially produces no specific response other than focusing attention, until it is associated with an unconditioned stimulus.

Stimulus Discrimination

The learned ability to differentiate between two similar stimuli based on differences in their significance or meaning.