Which of the following functions of money would be least affected if the economy experiences high rates of inflation?
A) unit of account
B) store of value
C) standard of deferred payment
D) medium of exchange
A
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What happens if the economy is at its long-run equilibrium and aggregate demand increases?
What will be an ideal response?
Suppose that only two goods are produced in an economy. If a country possesses the comparative advantage in the production of one good then it:
A. must also possess the comparative advantage in the production of the other good. B. must also possess the absolute advantage in the production of that good. C. cannot also possess the comparative advantage in the production of the other good. D. cannot also possess the absolute advantage in the production of that good.
At relatively high levels of disposable income
A. both the APC and APS are high. B. both the APC and APS are low. C. the APC is high and the APS is low. D. the APC is low and the APS is high.
Opportunity cost is
A) the intrinsic value of an economic good. B) the total value of all the alternatives forsaken when a choice is made. C) the value of the opportunity selected when a need is satisfied. D) the value of the next highest—ranked alternative that must be sacrificed to obtain a want.