An Increase in the Value of a Domestic Currency in Terms

question 372

Multiple Choice

An increase in the value of a domestic currency in terms of other currencies is known as

• A) an appreciation.
• B) a depreciation.
• C) a flexible exchange rate.
• D) a term not given in the above answers.

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Definitions:

Excise Taxes

Taxes paid when purchases are made on a specific good, such as gasoline, usually levied by the government on the sale of goods and services.

Shifting of Taxes

The process by which the burden of a tax is transferred from one party, such as the seller, to another, such as the buyer.

Perfectly Inelastic

A situation where the demand for a product does not change in response to a change in price.

Excise Tax

A tax levied on specific goods, services, or transactions, often based on quantity purchased rather than value, such as taxes on cigarettes, alcohol, and fuel.