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gangulo gangulo
wrote...
Posts: 509
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6 years ago
If prices rise within a country, then, other things equal, the value of a unit of domestic currency will:
 a. rise in both the domestic and the foreign exchange markets.
  b. fall in both the domestic and the foreign exchange markets.
  c. rise in the domestic market and fall in the foreign exchange market.
  d. fall in the domestic market and rise in the foreign exchange market.
  e. fluctuate unpredictably in both domestic and foreign exchange markets.

Question 2

The purchasing power parity theory is limited in its applicability by the facts that some goods are not internationally traded and some countries impose tariffs on imported goods.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 3

Which of the following is potentially an option to save Social Security?
 a. Increasing the payroll tax rate
 b. Increasing the age required for full-time benefits.
  c. Implementing means testing
 d. all of the above

Question 4

Suppose a hefty rise in the demand for Mexican pesos create a chronic shortage of this currency in the foreign exchange market. Which of the following steps should be adopted by the Mexican government to eliminate this shortage?
 a. The government should impose a ban on Mexican exports.
  b. The government should devalue the peso.
  c. The government should print more pesos to increase its supply.
  d. The government should allow the peso to appreciate.
  e. The government should allow the peso to depreciate.

Question 5

If at current exchange rates it was cheaper to buy a product in country B than country A, we would expect people to sell country A's currency and buy country B's currency, according to the purchasing power parity theory.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 6

A regressive tax:
 a. is designed to take a larger percentage of higher incomes as compared to lower incomes.
 b. is designed in such a way that as a person's income rises, the amount of tax as a proportion of income rises.
  c. takes a greater proportion of the income of lower-income groups than of higher-income groups.
 d. is considered to be the most equitable type of tax.

Question 7

Currency speculators are traders who seek to profit from a(n):
 a. shift in global demand and supply patterns.
  b. increase in the price of oil.
  c. sudden shift in interest rates.
  d. exchange rate change by selling the currency expected to appreciate and buying the currency expected to depreciate.
  e. exchange rate change by selling the currency expected to depreciate and buying the currency expected to appreciate.

Question 8

If at current exchange rates it was cheaper to buy a product in country A than country B, the purchasing power parity theory would increase the relative exchange value of country A's currency.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 9

Which of the following is generally considered the most regressive type of tax?
 a. gift tax
 b. federal income tax
  c. excise tax
 d. payroll tax

Question 10

A permanent shift in the foreign exchange market supply and demand curves such that the fixed exchange rate is no longer an equilibrium rate is referred to as:
 a. permanent devaluation.
  b. speculative disequilibrium.
  c. permanent revaluation.
  d. speculative equilibrium.
  e. fundamental disequilibrium.
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Replies
wrote...
6 years ago
Answer to q. 1

b

Answer to q. 2

TRUE

Answer to q. 3

d

Answer to q. 4

d

Answer to q. 5

TRUE

Answer to q. 6

c

Answer to q. 7

e

Answer to q. 8

TRUE

Answer to q. 9

c

Answer to q. 10

e
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