If incomes decrease in the United States, Americans will buy more goods, including foreign goods. This increase in demand for foreign goods will cause an increase in the demand for euros.
a. True
b. False
Indicate whether the statement is true or false
Question 2Which of the following is an example of a progressive tax?
a. Social Security tax
b. federal income tax
c. excise tax
d. payroll tax
Question 3Suppose a permanent increase in demand for the Argentinean peso causes a chronic shortage of this currency in the foreign exchange market. The Argentinean government should then:
a. request other countries to revalue their currency.
b. devalue the peso.
c. allow the peso to appreciate.
d. restricts exports.
e. restrict imports.
Question 4Deflation in the United States would tend to make the exchange value of the dollar depreciate.
a. True
b. False
Indicate whether the statement is true or false
Question 5The U.S. federal government relies more heavily on ____ than any other government.
a. excise taxes
b. sales taxes
c. customs duties
d. income-based taxes
Question 6Carlos Silva, a Colombian singer, goes on tour to the United States for one month, following high American demand for his live shows. Assuming that all the show's expenses are paid by the U.S. promoters, other things equal, the U.S. tour will bring about:
a. a decreased supply of Colombian pesos in the foreign exchange market.
b. an increased supply of American dollars in the foreign exchange market.
c. an increased supply of Colombian pesos in the foreign exchange market.
d. a decreased demand for Colombian pesos in the foreign exchange market.
e. an increased demand for American dollars in the foreign exchange market.
Question 7If interest rates rise in the United States relative to those in the rest of the world, the exchange value of the dollar will tend to appreciate.
a. True
b. False
Indicate whether the statement is true or false
Question 8Which of the following accounts for the largest percentage of federal taxes?
a. gift taxes
b. social security tax
c. individual income taxes
d. corporate income taxes
Question 9In 1991, the French mineral water Perrier was temporarily taken off the market in the United States because of suspected impurities. Other things equal, this action brought about:
a. an increase in the demand for Perrier.
b. a decrease in the price of Perrier in terms of French francs.
c. a depreciation of the French franc relative to the U.S. dollar.
d. an appreciation of the French franc relative to the U.S. dollar.
e. an increased supply of dollars in the foreign exchange market.
Question 10Differences among nations in real economic growth rates, real interest rates, and inflation rates will each affect the exchange rates among their currencies.
a. True
b. False
Indicate whether the statement is true or false
Question 11Which of the following accounted for the highest percentage of state and local spending?
a. education and health care
b. police and fire protection
c. highways
d. social security
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