In Country A, the government introduced printed pieces of paper that promise to pay the bearers a certain amount of money. People of the country started using the pieces of paper as a medium of exchange. In this country, the printed paper is an example of:
a. near money
b. fiat money.
c. fiduciary money.
d. commodity money.
b
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Your aunt gives you a PepsiCo bond with face value of $5,000 . It will mature in two years. Currently, the interest rate is 10 percent (0.10) per year. How will the value of the bond change if the interest rate falls to 5 percent tomorrow morning?
a. It will rise by $413.22. b. It will rise by $402.90. c. It will rise by $432.90. d. It will fall by $432.90. e. It will fall by $402.92.
When federal government spending exceeds tax revenues, the federal government runs a budget surplus.
Answer the following statement true (T) or false (F)
In the above figure, the long-run cost curve between points C and D illustrates
A. diseconomies of scale. B. diminishing marginal product. C. constant returns to scale. D. economies of scale.
Studies have shown that
A) firms often cut nominal wages during recessions and allow inflation to gradually increase real wages. B) firms are reluctant to cut nominal wages during recessions but instead increase workers' nominal wages and allow inflation to gradually increase real wages. C) firms are reluctant to cut nominal wages during recessions but instead freeze workers' nominal wages and allow inflation to gradually reduce real wages. D) firms often freeze workers' nominal wages during a recession and keep the wages frozen well after the recession has ended.