Under a system of flexible exchange rates, transactions that increase the supply of the nation's currency to the foreign exchange market will cause the nation's
a. currency to depreciate in value.
b. currency to appreciate in value.
c. trade deficit to increase.
d. products to become more expensive to foreigners.
A
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The more that Clayton earns, the higher is his average tax rate. Clayton faces a ________ income tax
A) regressive B) proportional C) progressive D) flat-rate
In the basic 45-degree line model, what is the effect of a decrease in the price level?
a. The expenditure line will shift downward. b. The expenditure line will shift upward. c. There will be movement to the left on the expenditure line. d. There will be movement to the right on the expenditure line.
Economic cost differs from accounting cost because accountants do not consider implicit costs.
Answer the following statement true (T) or false (F)
Crowding out is the tendency for increased government deficits to:
A. increase investment spending. B. reduce consumption spending. C. increase consumption spending. D. reduce investment spending.