The unit of account characteristic of money:
A. means that money finalizes payments.
B. makes it difficult to compare the relative prices of goods and services.
C. means prices are expressed in terms of money.
D. refers to how we use money to transfer purchasing power over time.
Answer: C
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If both supply and demand decrease by the same amount, the equilibrium price
A) does not change. B) rises. C) falls. D) cannot be predicted. E) None of the answers is correct because the price depends on what happens to the equilibrium quantity.
To increase the money supply, the Fed can
a. buy government bonds or increase the discount rate. b. buy government bonds or decrease the discount rate. c. sell government bonds or increase the discount rate. d. sell government bonds or decrease the discount rate.
Developing countries do:
A. compete with one another for foreign investment, and this competition reduces the benefits from foreign investment. B. not compete with one another for foreign investment, because they have sufficient domestic saving to finance their investment needs. C. not compete with one another for foreign investment, because they lack the infrastructure to attract it in the first place. D. compete with one another for foreign investment, but this competition is beneficial to developing countries because it insures a more efficient allocation of resources.
wars and natural disasters are referred as _______ shocks
Fill in the blank(s) with the appropriate word(s).