One of the benefits of money as a medium of exchange is that
A. it allows individuals to compare the relative value of goods.
B. it allows for specialization that leads to economic efficiencies.
C. it allows for private transactions such as trading vegetables for medical services.
D. over time it will become more valuable so that individuals can purchase more goods and services.
Answer: B
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Which of the following explains why frictional unemployment exists in an economy?
A) It arises because job search is completely a supply side phenomenon in the labor market, and firms make no attempts to advertise for the vacancies they have. B) It arises because most of the workers shirk at work. C) It arises because it takes time for an unemployed worker to find a firm with a well-matched job vacancy. D) It arises because unemployment benefits encourage workers not to look for jobs.
A black market can emerge for a good if ________
A) the good is taxed heavily B) there is an excess supply of a good C) the consumption of the good is subsidized D) the production of the good is subsidized
According to the quantity theory of money, if an economy produces 5,000 units of output, its money supply equals $40,000 and the velocity of money equals one, then the price level will equal:
A. $0.13. B. $1.25. C. $8. D. $200.
Determining the comparative advantage of a country requires that you look at the economic notion of
A. accounting and economic profit. B. opportunity cost. C. external costs. D. ceteris paribus.