Only the federal government can create money.
Answer the following statement true (T) or false (F)
False
Money can also be created through the banking system with the money multiplier.
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Suppose that the total production of an economy consists of 10 oranges and 5 candy bars, each orange sells for $0.20, and each candy bar sells for $1.00. Which expression of the output of this economy is most consistent with the concept of GDP?
A. This economy produces two-thirds oranges and one-third candy bars. B. This economy produces food valued at $1.20. C. This economy produces $7.00 worth of food. D. This economy produces 15 food items.
The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
People who live in apartment buildings across from a football stadium are able to watch football games from the balconies of their apartments instead of paying for tickets to sit inside the stadium. For these free riders, the football games are
A) rival and excludable. B) rival and nonexcludable. C) nonrival and excludable. D) nonrival and nonexcludable.
If purchasing-power parity holds, then the value of the
a. real exchange rate is equal to one. b. nominal exchange rate is equal to one. c. real exchange rate is equal to the nominal exchange rate. d. real exchange rate is equal to the difference in inflation rates between the two countries.