Exchange Rates Determined by the Forces of Demand and Supply

question 11

Multiple Choice

Exchange rates determined by the forces of demand and supply are called

• A)fixed exchange rates.
• B)floating exchange rates.
• C)equilibrium exchange rates.
• D)dirty exchange rates.

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Definitions:

At-Risk Rules

Tax regulations limiting the amount of deductible losses from certain types of investments to the amount actually at risk.

Passive Activity

Economic activities in which the taxpayer does not materially participate, like rental property, often with distinct tax rules.

Suspended Passive Losses

Losses from passive activities that exceed income from passive activities, which cannot be deducted in the current year and must be carried forward to future tax years.

At-Risk

The at-risk rules limit the amount of loss a taxpayer can claim to the amount actually at risk in the investment activity.