Assume That U

question 43

Multiple Choice

Assume that U.S. annual inflation equals 8%, while Japanese annual inflation equals 5%. If purchasing power parity is used to forecast the future spot rate, the forecast would reflect an expectation of:

• A) appreciation of yen's value over the next year.
• B) depreciation of yen's value over the next year.
• C) no change in yen's value over the next year.
• D) information about interest rates is needed to answer this question.

---

Definitions:

Biofeedback Training

A method that teaches individuals to improve their health by controlling certain bodily processes that normally happen involuntarily.

Systematic Desensitization

A therapeutic method used to reduce fear or anxiety by gradually exposing the patient to the feared object or situation in a controlled manner.

Counterconditioning

A behavior therapy technique where a positive response is conditioned to replace a negative or unwanted response to a stimulus.

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior, whereby an association is made between a behavior and a consequence for that behavior.