Can the US

question 177

Multiple Choice

Can the U.S.dollar and the European euro both appreciate relative to each other?

• A)Yes, both countries can gain in this manner.
• B)Yes, provided the central banks permit it.
• C)No, unless there is a system of fixed exchange rates.
• D)No, if one currency appreciates, the other must depreciate.

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Definitions:

External Costs

Costs of a transaction or activity that affect parties who are not directly involved in it, such as pollution affecting the wider community.

Law of Demand

The principle that, all else being equal, an increase in the price of a good will decrease the quantity demanded, and a decrease in price will increase the quantity demanded.

Income Taxes

Taxes levied by governments on individual or corporate income.

Car Rental

A service that allows customers to borrow a vehicle for a certain period of time in exchange for a fee.