If a Nation's Interest Rates Are Relatively High Compared to Those

question 161

Multiple Choice

If a nation's interest rates are relatively high compared to those of other countries, then the exchange value of its currency will tend to

• A) depreciate under a system of floating exchange rates.
• B) depreciate under a system of fixed exchange rates.
• C) appreciate under a system of fixed exchange rates.
• D) appreciate under a system of floating exchange rates.

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Definitions:

Three-Component Model

A model in psychology that views attitude as having cognitive, affective, and behavioral components.

Attitudes

Psychological tendencies expressed by evaluating particular entities with some degree of favor or disfavor, reflecting how individuals think, feel, and are inclined to act.

Information Integration Theory

The idea that a person’s attitude can be estimated by averaging across the positive and negative ratings of the object.

Cognitive Algebra

Approach to the study of impression formation that focuses on how people combine attributes that have valence into an overall positive or negative impression.