When money is accepted as payment for a good or service, it is being used as a
A) medium of exchange.
B) mechanism for transforming current purchases into future purchases.
C) store of value.
D) unit of account.
A
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If two goods were to become even stronger substitutes than before, an economist would expect the cross elasticity to become:
a. positive. b. one. c. zero. d. smaller. e. larger.
If aggregate demand decreases and expectations regarding inflation remain constant
A. the long-run Phillips curve shifts to the right. B. the economy moves along the short-run Phillips curve. C. the short-run Phillips curve shifts to the right. D. the short-run Phillips curve shifts to the left.
Adam Smith coined the term "invisible hand" to describe the process by which the actions of independent, self-interested buyers and sellers will:
A. always lead to the most efficient allocation of resources. B. often lead to increasing inequality. C. always lead an economy to ruin. D. often lead to the most efficient allocation of resources.
According to the early Keynesians,
a. the money demand function was unstable; the interest elasticity of money demand was extremely high; and, as a consequence, changes in the quantity of money did not have important predictable effects on the level of economic activity. b. the money demand function was stable; the interest elasticity of money demand was low; and, as a consequence, changes in the quantity of money did not have important predictable effects on the level of economic activity. c. the money demand function was unstable; the interest elasticity of money demand was low; and, therefore, changes in the quantity of money did not have important effects on the level of economic activity. d. the money demand function was stable; the interest elasticity of money demand was high; and, therefore, changes in the quantity of money did have important effects on the level of economic activity.