Money solves the problem of double coincidence of wants that would regularly occur under a system of credit

Indicate whether the statement is true or false


FALSE

Economics

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Suppose the government runs a budget surplus in a given year. It can reduce its overall federal debt by

A) not buying anything on credit. B) forcing a change in net exports. C) increasing taxes on luxury items. D) buying back bonds it sold to the public.

Economics

When the Fed buys $100 million of securities from a commercial bank the

A) required reserve ratio decreases. B) monetary base increases. C) bank's reserves decrease. D) bank is risking its depositors' money. E) money supply decreases.

Economics

Suppose you find $1000 in your attic and decide to deposit it all into your local bank, which must hold 10% as required reserves. The deposit expansion multiplier suggests that this $1,000 "injection" of new money will, in reality, most likely

A) increase the money supply by more than $1,000. B) increase the money supply by less than $1,000. C) increase the money supply by exactly $1,000. D) increase the money supply by exactly $10,000.

Economics

Smith and Jones comprise a two-person economy. Their hourly rates of production are shown in the accompanying table. Calculators Per HourComputers Per HourSmith10010Jones1206 The opportunity cost of making a calculator for Smith is ________ and for Jones it is ________.

A. 1 computer; 0.5 computers B. 0.10 computers; 0.05 computers C. 10 computers; 20 computers D. 0.6 computers; 1.2 computers

Economics