Money cannot serve as a medium of exchange unless it also serves as a store of value. Is this statement true or false? Explain
What will be an ideal response?
This statement is true. If money does not hold its value over time, it will not be accepted in exchange for goods and services. I must be confident that money I accept today for a good or service rendered will be considered valuable tomorrow when I seek to trade it for a good or service. Lacking that confidence I will not accept money today.
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In the figure above, the equilibrium exchange rate is expressed as $1 U.S. equals
A) $2.00 Canadian. B) $1.50 Canadian. C) $0.50 Canadian. D) none of the above
From the Keynesians' perspective, a short-run Phillips Curve exists because
A) wages and prices are perfectly flexible. B) money demand is unstable. C) investment is unstable. D) wages change more slowly than the price level.
If the firm in Figure 17-4 above maintains its set price of P0, rather than dropping price to P1, this reduces its profit by
A) K - G. B) K + G. C) G - K. D) G + H. E) G.
Which of the following is most likely a topic of discussion in a microeconomics course?
a. a decrease in the share of national income paid to the government in taxes b. an increase in the price of lumber used to construct houses c. an increase in the rate of inflation d. an increase in the number of jobless individuals filing unemployment claims