An important problem with the gold standard was that
A. exchange rates tended to fluctuate a great deal, making it difficult for businesses to make long-run plans.
B. a country did not have control of its domestic monetary policy.
C. one country could easily manipulate the system to its advantage and the disadvantage of other countries.
D. it was too complicated and restricted business activity.
Answer: B
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Assume you have a credit card balance of $2,000 at 15 percent and the inflation rate is 3 percent. What are the nominal and real interest rates?
A) 15 percent nominal and 12 percent real B) 12 percent nominal and 15 percent real C) 15 percent nominal and 3 percent real D) 3 percent nominal and 12 percent real E) 15 percent nominal and 18 percent real
Which of the following correctly describes the national debt?
a. The excess of annual federal expenditures over annual federal tax revenues. b. Annual federal expenditures less annual federal tax revenues plus foreign U.S. bonds purchases. c. The total amount of money owed by the federal government. d. None of the above.
Which of the following is included in both M1 and M2?
a. currency b. demand deposits c. other checkable deposits d. All of the above are correct.
Which of the following is a feature of a contestable market?
A. There is a single firm in the market serving many consumers. B. There is a single firm in the market serving many consumers and the market price is equal to marginal cost. C. The market price is equal to marginal cost. D. There are several firms in the market serving many consumers.