If a Currency's Par Rate (Defined as United States (US)dollars

question 111

Multiple Choice

If a currency's par rate (defined as United States (US) dollars per unit of foreign currency) was ________ the equilibrium rate and this persisted, then under the Bretton Woods System, the country would be allowed a currency ________.

• A)above; devaluation
• B)equal to; devaluation
• C)below; devaluation
• D)above; overvaluation

---

Definitions:

Vertical Equity

A principle in taxation that suggests taxpayers with a greater ability to pay should contribute more in taxes.

Ronald Reagan

The 40th President of the United States, serving from 1981 to 1989, known for his economic policies known as "Reaganomics".

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the proportion of any additional dollar of income that will be taken as tax.

Lump-Sum Tax

A tax that is a fixed amount, not dependent on the taxpayer's income level or assets' value.