The Purchasing Power of the Dollar

question 6

Multiple Choice

The purchasing power of the dollar

• A) varies directly with the price of gold.
• B) varies directly with interest rates.
• C) varies directly with the price level.
• D) varies inversely with the price level.

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Definitions:

Free Trade

A policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas.

Imported Tires

Tires that are manufactured outside a country and are brought in through trade.

Stimulus Plan

A package of economic measures put together by a government to stimulate a floundering economy.

Immigration

The action of coming to live permanently in a foreign country.