If the Law of One Price Holds for All Goods

question 11

True/False

If the law of one price holds for all goods, the real exchange rate equals zero.

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Definitions:

Conditioned Response

A response that, through repeated pairings, is evoked by a formerly neutral stimulus.

Unconditioned Response

A naturally occurring response (e.g., salivation).

Operant Conditioning

A process of learning in which a behavior's force is altered through positive reinforcement or penalties.

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus.