Even when people know the purchasing power of the currency is declining, they continue to use the currency because
A. its value is still predictable.
B. it still has some intrinsic value.
C. the return of holding currency is always higher than the returns of all other assets.
D. they have no other choice.
Answer: A
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The income elasticity of demand for skiing trips to Vermont is greater than one. Thus a trip to Vermont for skiing is ________ good
A) a normal B) an inferior C) a unit elastic D) a price elastic E) a price inelastic
In the open economy of Sildavia, government spending during 2005 was $30 billion, consumption was $70 billion, taxes were $20 billion, and GDP was $100 billion. If investment spending in Sildavia during 2005 was $10 billion, we can conclude that Sildavia registered:
A. a net capital inflow of $10 billion. B. capital inflows of $10 billion and capital outflows of $20 billion. C. a trade surplus of $20 billion and a financial deficit of $20 billion. D. a net capital outflow of $10 billion.
Suppose your neighbor owns a restaurant and boasts that he is able to turn a handsome accounting profit because of his low labor costs. He attributes this to the fact that he uses his sons and daughters as cooks and waiters
His point is that he offers them below-market wages. How would you respond to your neighbor's statement? What would you tell him to expect as his children continue to work for him while they are in college and beyond?
Which of the following best illustrates diversification?
a. A company that produces many different products decides to produce fewer. b. After selling stock, corporate management spends funds on projects with greater risks than shareholders had anticipated. c. Instead of holding only the stocks of companies engaged in the banking business, a person decides to hold stock in a number of different companies producing different goods and services. d. A person decides to purchase only stocks that have paid high dividends in the past.