________ Exchange Rates Are Exchange Rates That Are Determined by the Market

question 101

Multiple Choice

________ exchange rates are exchange rates that are determined by the market forces of supply and demand for currency.

• A) Rigid
• B) Stock
• C) Government-determined
• D) Pegged
• E) Floating

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Definitions:

Tax Per Unit

A tax that is levied on a product based on the amount of the product sold, not on its value.

Consumer Surplus

The incongruity between what consumers are willing to expend on a good or service and what they truly expend.

Producer Surplus

The difference between what producers are willing to accept for a good or service and the actual amount they receive.

Opportunity Cost

Opportunity cost represents the value of the best alternative that must be forgone as a result of choosing another option.