A main function of money is to avoid the need for double coincidence of wants. This is the
a. medium of exchange function.
b. standard of value function.
c. standard of deferred payment function.
d. store of value function.
a. medium of exchange function.
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There is a difference between who is legally required to send a tax payment to the government and who bears the burden of the tax. Which of the following would have the most impact on who bears the burden of an excise tax?
A) The elasticity of demand for the item that is taxed. B) whether the tax is based on the ability-to-pay principle or the benefits-received principle C) whether the tax is imposed by the federal government or a state government D) The motive for the tax. If the tax is designed to raise revenue, more of the burden will fall on firms. If the tax is designed to achieve a social objective (for example, to discourage smoking) more of the burden will fall on consumers.
Which of the following best defines an optimum currency area?
A) a group of nations sharing the same currency B) a group of regions in close proximity to each other. C) a group of regions who operate under similar economic policies. D) a group of regions with economies closely linked by factor mobility and by trade in goods and services E) a group of nations that engage in free trade with each other
Rising interest-rate risk
A) increased the cost of financial innovation. B) increased the demand for financial innovation. C) reduced the cost of financial innovation. D) reduced the demand for financial innovation.
Managers can be seen as monitoring ____ within the firm
A) externalities. B) property rights C) stockholders. D) accounting profits.