Though many assets can be used as a store of value, money is a particularly attractive method to store value because:
a. it increases in value as prices rise.
b. its purchasing power does not decline when prices rise.
c. it is the most liquid of all assets.
d. it is backed by gold.
c
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Which of the following is likely to be more of a problem after the introduction of deposit insurance?
A) moral hazard B) adverse selection C) contagion D) bank runs
Your income response for bicycle riding changes with the amount of income you earn. At low levels of income, you view bicycle riding as an inferior good and substitute other types of transportation (e.g., auto travel) as your income rises
However, you view bicycle riding as a normal good after your income rises above a particular level. What shape does your Engel curve for bicycle riding have? A) Vertical line B) Horizontal line C) C-shaped D) Upward sloping E) none of the above
Suppose prices for new homes have risen, yet sales of new homes have also risen. We can conclude that:
a. the demand for new homes has risen. b. the law of demand has been violated. c. new firms have entered the construction industry. d. construction firms must be facing higher costs.
In 1975 tuition at Wattsomata University was $2,500 and the consumer price index was 80 . In 2011 tuition was $12,000 and the price index was 320 . Which of the following is correct?
a. Nominal and real tuition were both higher in 1975. b. Nominal and real tuition were both higher in 2011. c. Nominal tuition was higher in 1975, real tuition was higher in 2011. d. Nominal tuition was higher in 2011, real tuition was higher in 1975.