The price of one country's currency in terms of another country's currency is the
A. terms of trade.
B. exchange rate.
C. currency valuation.
D. balance of trade.
Answer: B
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A difference between a quota and a tariff is that
A) a tariff generates a higher price than does a quota. B) a tariff generates a greater reduction in exports than does a quota. C) a quota increases profits of domestic producers more than does a tariff. D) the government collects revenue from a tariff but does not collect revenue from a quota.
An income tax for which the average tax rate is constant called a
A) regressive income tax. B) proportional income tax. C) marginal income tax. D) progressive income tax.
People make mistakes in allocating their time
a. only when leisure time is an inferior good b. because expectations are not always fulfilled c. more often when the cost of making a mistake is high d. only when economists remove the assumption that individuals are rational e. because information is free and readily available
Which of the following statements is correct? In the special case of the 100-percent reserve banking the money multiplier is
a. 0 and banks create money. b. 0 and banks do not create money. c. 1 and banks create money d. 1 and banks do not create money.