The average tax rate is defined as
a. the average number of times a circulating dollar is taxed during a year.
b. the change in the tax rate as income increases.
c. the change in the tax rate as income decreases.
d. tax liability divided by taxable income.
D
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Interest rate parity occurs when
A) interest rates are equal across nations. B) interest rate differentials are always maintained across nations. C) interest rates no longer affect the exchange rate. D) prices are equal across nations when exchange rates are taken into account. E) the interest rate in one currency equals the interest rate in another currency when exchange rate changes are taken into account. The figure above shows the demand curve for dollars in the foreign exchange market.
To deal with dangerous behavior in the financial system, macro prudential tools can be used to aim directly at
A) borrowers. B) lenders. C) banks and other financial institutions. D) none of the above E) all of the above