During 2011,the Price Level in the U

question 42

Multiple Choice

During 2011,the price level in the U.S.rose at a faster rate than the price level in Japan.Other things the same,according to purchasing-power parity,this difference in inflation rates should have caused

• A)the nominal exchange rate of the dollar to appreciate relative to the yen.
• B)the real exchange rate of the dollar to appreciate relative to the yen.
• C)the nominal exchange rate of the dollar to depreciate relative to the yen.
• D)the real exchange rate of the dollar to depreciate relative to the yen.

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Definitions:

Drive-Reduction Theory

A theory in psychology that explains motivation as being rooted in biological needs that drive behavior towards reducing or eliminating those needs.

Behavioral-Learning Theory

A theory that emphasizes learning through interactions with the environment and the association between stimuli and responses.

Separation Anxiety

The distress that babies show when the person to whom they are attached leaves.

Stranger Wariness

A developmental phase in infants where they show anxiety or fear towards unfamiliar people.