Ray has taken out a home equity loan so that he can redo his kitchen. Every month until the loan is paid off, Ray will make a payment to his bank. This best illustrates money’s function as a ______.
a. unit of account
b. medium of exchange
c. means of deferred payment
d. store of value
c. means of deferred payment
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Which of the following statements about tariffs is true?
A. The revenue gained from tariffs equals the total cost that tariffs impose on consumers. B. The costs of tariffs are proportionately higher for high-income groups than for low-income groups. C. U.S. consumers lose more from tariffs than U.S. producers gain. D. U.S. producers gain more from tariffs than U.S. consumers lose.
Consider an economy in equilibrium, and assume no change in aggregate demand. An earthquake that destroys many factories across the country would result in a(n):
a. increase in the average price level and a decrease in real GDP. b. increase in the average price level and no change in real GDP. c. increase in the average price level and an increase in real GDP. d. decrease in the average price level and an increase in real GDP. e. decrease in the average price level and a decrease in real GDP.
Which of the following are factors of production?
a. Just labor and capital in industrialized countries, where natural resources are no longer used to produce goods and services. b. Land (natural resources), labor (human capital, entrepreneurship), and capital (constructed inputs such as factories). c. The outputs generated by the production process transforming land, labor, and capital in to goods and services. d. Restricted to the land resources such as natural resources that are unimproved by human economic activity.
If commercial banks are maintaining a 5 percent reserve/deposit ratio and the Fed lowers the required reserve ratio to 3 percent, then banks may ________ their loans and deposits, and the money supply may ________.
A. decrease; increase B. decrease; decrease C. increase; increase D. increase; decrease