The Graph Shows the Supply and Demand Curves for Dollars

question 22

Multiple Choice

The graph shows the supply and demand curves for dollars in the pound/dollar market. Assume that D₁ and S₁ are the initial demand for and supply of dollars. The exchange rate will be

• A)$5 equals 1 pound.
• B)$4 equals 1 pound.
• C)$1 equals 5 pounds.
• D)$0.20 equals 1 pound.

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Definitions:

Equal Opportunities

The principle that all individuals should have the same opportunities to advance socially and economically, without facing discrimination or bias.

Negative Income Tax

A taxation framework where individuals earning under a specified threshold get additional compensation from the government rather than contributing tax.

Earned Income Tax Credit

A refundable tax credit for low- to moderate-income working individuals and families, designed to encourage and reward work.

Negative Income Tax

A tax system where people earning below a certain amount receive supplemental pay from the government instead of paying taxes.