The precautionary demand for money is when people hold money
A. as a medium of exchange.
B. to meet unplanned expenditures.
C. for the interest it yields.
D. as a store of value.
Answer: B
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In the aftermath of the human devastation and misery of the Great Depression, many people—including many economists—became more aware of
a. the need for independence in the market-oriented economic system. b. the need to replace the market-oriented economic system. c. vulnerabilities within the market-oriented economic system. d. the strengths of the market-oriented economic system.
Suppose France subsidizes French wheat farmers, while Germany offers no subsidy to German wheat farmers. As a result of the French subsidy, sales of French wheat to Germany
a. may prompt German farmers to invoke the unfair-competition argument. b. increase the consumer surplus of German buyers of wheat. c. increase the total surplus of the German people. d. All of the above are correct.
Reducing protectionism allows greater gains from free trade.
Answer the following statement true (T) or false (F)
An example of a case in which free markets do not align self-interest with social interest is pollution-emitting production:
Indicate whether the statement is true or false