A Recent Study by Andrew Rose of the University of California

question 37

Multiple Choice

A recent study by Andrew Rose of the University of California showed that, on average, two countries that are members of the same currency union

• A) trade three times as much with each other as countries that do not share a currency.
• B) trade twenty times as much with each other as countries that do not share a currency.
• C) trade ten times as much with each other as countries that do not share a currency.
• D) trade six times as much with each other as countries that do not share a currency.
• E) trade twice as much with each other as countries that do not share a currency.

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Definitions:

Federal Insurance Contributions Act

A U.S. law that requires employees to contribute to Social Security and Medicare, with matching contributions from employers.

Burden Of The Tax

The impact of a tax on the economic welfare of individuals, showing who ultimately bears the cost of the tax.

Excise Tax

A direct tax placed on manufactured goods, and is often levied at the time of manufacture, rather than at sale.

Inelastic Supply

A market condition where the quantity supplied of a good does not change significantly when its price changes.