Currency Traders Expect the Dollar to Appreciate

question 277

Multiple Choice

Currency traders expect the dollar to appreciate.What impact will this have on equilibrium in the foreign exchange market?

• A)The dollar will appreciate,and the equilibrium quantity of dollars will decrease.
• B)The dollar will depreciate,and the equilibrium quantity of dollars exchanged will decrease.
• C)The dollar will appreciate,and the equilibrium quantity of dollars will increase.
• D)The dollar will appreciate,and the change in the equilibrium quantity of dollars exchanged cannot be determined.

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Definitions:

Regressive Tax

A tax system in which the tax rate decreases as the taxable amount increases, disproportionately affecting lower-income individuals.

Supply-side Economics

An economic theory that advocates reducing taxes and decreasing regulation to stimulate economic growth by increasing supply of goods and services.

Majoritarian Politics

A political philosophy or agenda that asserts the majority's right to make decisions that affect the society, often at the expense of minority opinion or rights.

Types of Taxes

Refers to the various ways in which governments generate revenue from individuals and businesses, including income tax, sales tax, property tax, and more.