Which of the Following Is Correct

question 138

Multiple Choice

Which of the following is correct?

• A) If a nation changes its money supply, it disrupts the long-run PPP equilibrium, which causes traders to purchase in the cheaper markets and sell in the pricier markets, which, in turn, causes demand for the domestic currency (vis-à-vis the international currency) to be lower.
• B) The peg changes the long-run expectation of exchange rates, and this is a determinant of short-run rates which, in turn, affect deposit rates of return.
• C) The Federal Reserve has complete control of monetary policy; it is independent of political control, so, in the United States at least, monetary policy can coexist with an exchange rate peg.
• D) Pegging its own currency causes a nation to lose political control, and it is then forced to sell its own resources at world prices.

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Definitions:

Reinforcement

A concept in behaviorism that involves increasing the likelihood of a behavior's occurrence through the administration of rewards or punishments.

Operant Conditioning

Operant conditioning is a learning process through which the strength of a behavior is modified by reinforcement or punishment.

Classical Conditioning

Pavlovian Conditioning, an associative learning process through which an animal or human learns to link two stimuli, with one stimulus coming to evoke a response originally evoked by the other.

Animal's Behavior

The actions or reactions of animals in response to external or internal stimuli, often studied to understand instinctual and learned behaviors.