In an exchange economy:
A. people produce goods, but do not own or trade them.
B. people own and trade goods, but no production takes place.
C. people produce, own and trade goods.
D. people trade goods, but do not own them or produce them.
B. people own and trade goods, but no production takes place.
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The process of converting a future amount of money into its value today is called
A) trending. B) depreciation. C) discounting. D) compounding.
If the economy is in a recession,
A. The economy suffers from structural unemployment, which can be alleviated by debt refinancing. B. Larger deficits will decrease the national debt. C. It is operating inside the production possibilities curve, and the opportunity cost of deficit spending is zero. D. Deficit spending will not increase the size of the debt because interest rates will be falling.
If a country is concerned about protecting a particular industry for national security reasons, which of the following policies is most effective from an economic standpoint?
A. Voluntary export restraints on countries exporting goods to the United States B. Import licensing C. Targeted government subsidies D. Protectionist tariffs
A purchase of government debt as part of open market operations would be an example of
A. contractionary monetary policy. B. contractionary fiscal policy. C. expansionary fiscal policy. D. expansionary monetary policy.