You pay for cheese and bread from the deli with currency. Which function of money does this best illustrate?
a. medium of exchange
b. unit of account
c. store of value
d. liquidity
a
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Suppose that the spot exchange rate for a foreign currency is equal to $120, while the interest rate in dollars is 2% and the interest rate in the foreign currency is 3%. What is the approximate forward rate that is consistent with this situation?
A) $115.56 B) $124.44 C) $118.77 D) None of the above.
The marginal revenue product of labor is
a. how much labor can be purchased with the revenue from the sale of one more unit of the good b. how much the marginal revenue changes when you add more labor c. the same as the marginal revenue product of capital when the markets for labor and capital are in equilibrium d. determined by the wage rate e. the contribution to total revenue made by the marginal laborer
Over the past few decades, nominal interest rates have been higher than real rates of interest. This means that
a. lenders must have expected inflation. b. borrowers must have expected deflation. c. lenders must have expected prices to fall. d. borrowers must have expected prices to fall.
"Lower marginal tax rates encourage people to work, save, and invest, resulting in more output and a larger tax base." This statement most closely reflects which of the following schools of economic thought?
A. Keynesian B. Adam Smithian C. Marxist D. Supply-side economics