Why do economists insist on emphasizing the difference between money and income? Why is this difference important in macroeconomics?
What will be an ideal response?
Money is a stock variable that has a value at a point in time. Income is a flow variable that has a value over a time span. The basis for the confusion is that nearly all income variables are measured in dollars, the unit of account function of money. The difference is important in macroeconomics because it is through changes in the money stock that the Fed affects real variables such as real GDP (national income), employment, and wealth.
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In order to increase the capital stock, society must divert ________ that could be otherwise used to increase the current supply of ________.
A. credit; labor B. money; labor C. money; consumer goods D. resources; consumer goods
When the price of coffee is $2.2 per cup, 11 million cups are demanded, and when the price of coffee goes up to $2.6 per cup, 10 billion cups are demanded. The coffee in this range has a(n)
A. elastic demand. B. unit elastic demand. C. perfectly elastic demand. D. inelastic demand.
A country that limits imports by requiring a lengthy inspection process is using
A. quotas. B. tariffs. C. subsidies. D. non-tariff regulatory barriers.
Quantity supplied is determined by how much producers are willing and able to produce.
Answer the following statement true (T) or false (F)