When the Domestic Currency Strengthens Under a Fixed Exchange-Rate System,this

question 15

Multiple Choice

When the domestic currency strengthens under a fixed exchange-rate system,this is called

• A)a depreciation.
• B)an appreciation.
• C)a devaluation.
• D)a revaluation.

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Definitions:

Tax

An essential fiscal demand or variant form of duty exacted from a taxpayer by a governmental institution, intended to sustain government expenditure and miscellaneous public financial requirements.

Externality

An economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume.

Activity

Any action or task undertaken by individuals or groups, often resulting in production or consumption of goods or services.

External Costs

Costs of economic activities that affect third parties outside the transaction, which are not reflected in market prices.