Exhibit 20-4 -Imagine That There Are Only Two Nations in the World

question 166

Multiple Choice

Exhibit 20-4
-Imagine that there are only two nations in the world, Canada and Switzerland. Which of the following is true of the suppliers and demanders in this market, as represented in Exhibit 20-4?

• A) The demanders want Canadian dollars and are offering Swiss francs.
• B) The suppliers want Canadian dollars and are offering Swiss francs.
• C) Both the suppliers and the demanders are offering Canadian dollars.
• D) Both the suppliers and the demanders are offering Swiss francs.
• E) Francs are being exchanged by unknown suppliers and demanders in a money market in Switzerland; anyone could be trading.

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Definitions:

Tax Revenue

The financial earnings governments receive through taxing.

Income Inequality

The unequal distribution of an economy’s total income among households or families.

Minimum Standard

A predefined level of quality, performance, or capability that products, services, or processes must meet or exceed, often set by regulatory bodies.

Marginal Tax Rate

The marginal tax rate is the percentage of tax applied to your income for each tax bracket in which you qualify, essentially the tax rate on your last dollar of income.