To be accepted as money, an item must perform all of the following functions EXCEPT
A. be easily reproduced.
B. be a medium of exchange.
C. serve as a store of value.
D. serve as a standard of deferred payment.
Answer: A
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According to Adam Smith's invisible hand doctrine:
a. self-interest best serves the interests of society. b. laissez faire must be improved by government intervention. c. producers should serve the best interests of society. d. only laissez faire mercantilism best serves the interests of society.
Suppose that a large tornado destroys the fleet of fire trucks for the city of Omaha, Nebraska. What happens to the earnings of firefighters in Omaha?
a. The reduction in the supply of fire trucks reduces the marginal productivities of Omaha firefighters, which causes the equilibrium wage to fall. b. The reduction in the supply of fire trucks increases the marginal productivities of Omaha firefighters, which causes the equilibrium wage to fall. c. The reduction in the supply of fire trucks reduces the marginal productivities of Omaha firefighters, which causes the equilibrium wage to rise. d. The reduction in the supply of fire trucks increases the marginal productivities of Omaha firefighters, which causes the equilibrium wage to rise.
The ________ is the interest rate commercial banks pay to the Fed; the ________ is the interest rate commercial banks charge each other for short-term loans.
A. discount rate; federal funds rate B. federal funds rate; discount rate C. nominal interest rate; prime rate of interest D. nominal interest rate; real interest rate
The market structure for an industry can limit the amount of profit a firm can make.
Answer the following statement true (T) or false (F)