Markets
A) rely on voluntary exchanges of goods, services, or resources
B) refer to situations where almost all exchanges take place involuntarily.
C) are based on extensive price controls imposed by a ruling authority.
D) promote quantity determination free from the forces of demand and supply.
Answer: A) rely on voluntary exchanges of goods, services, or resources
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Use the following graph to answer the next question.
If the initial equilibrium interest rate was 5% and the money supply increased by $100 billion, then the new interest rate would be
A. 1%. B. 2%. C. 3%. D. 4%.
If the natural monopoly shown in the figure above is unregulated, it will sell
A) 2 million units. B) 3 million units. C) 4 million units. D) 5 million units.
The store of value function of money refers to the ability of money to
A) facilitate the exchange of goods and services. B) maintain its value over time. C) express relative scarcity. D) earn interest over time. E) increase its value over time.
The government implements fiscal policy when it changes
A) spending and/or interest rate. B) money supply and/or taxes. C) taxes and/or spending. D) taxes and/or interest rate.