Fiat money has value because it
a. is backed by gold.
b. can be used to buy goods and services.
c. can be exchanged for precious metals at a fixed price.
d. can be divided into smaller units.
e. All of the above are correct.
b
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In a progressive income tax system,
A) the marginal tax rate exceeds the average tax rate. B) the average tax rate exceeds the marginal tax rate. C) high income earners pay a lower percentage of their income in taxes than do low income earners. D) the tax rate depends solely on how long an individual has been in the labor force.
An incentive problem arising from decentralization of decision making is that
A. managers often recruit weaker subordinates and refrain from training them properly. B. the costs of coordination among local managers is very high. C. there is less effective use of central information and expertise. D. it leads to communication problems relating to performance evaluation of employees.
Compare how exports and imports affect consumers and producers in a domestic economy.
What will be an ideal response?
If the economy in the graph shown is currently at point B, and the government enacts contractionary fiscal policy, in the short run the economy will most likely move to point:
A. A B. It is likely to be unaffected and stay at point B C. C D. D