According to the Doctrine of Purchasing-Power Parity,which of the Following

question 23

Multiple Choice

According to the doctrine of purchasing-power parity,which of the following should depreciate if over the next year the inflation rate is higher in the U.S.than in the Euro area?

• A)both the U.S.real exchange rate and the U.S.nominal exchange rate
• B)the U.S.real exchange rate,but not the U.S.nominal exchange rate
• C)the U.S.nominal exchange rate,but not the U.S.real exchange rate
• D)neither the U.S.nominal exchange rate nor the U.S.real exchange rate

---

Definitions:

ERPs

Event-Related Potentials, which are measured brain responses that are the direct result of a specific sensory, cognitive, or motor event.

Stimuli

External or internal factors that elicit a response from a biological organism, which can be sensory, such as light and sound, or psychological, such as events or conditions that provoke reactions.

Endorphins

Natural chemicals produced by the body that interact with opiate receptors in the brain to reduce pain and boost feelings of pleasure or euphoria.

Evolutionary Advantage

A characteristic that enhances the survival or reproduction of organisms that possess it, relative to those that do not.