When money provides a yardstick that allows individuals to compare the relative values of goods and services, it is functioning as a
A. unit of accounting.
B. standard of deferred payment.
C. medium of exchange.
D. store of value.
Answer: A
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Classical economists argue that all workers could have been employed during the Great Depression if they had been willing to accept falling wages
But President Hoover and his supporters recommended that hours be cut before wages which increased unemployment. Indicate whether the statement is true or false
Marginal resource cost is the
a. cost of hiring another unit of a resource b. additional revenue generated by hiring one more unit of a resource c. additional output generated by hiring one more unit of a resource d. total cost of hiring a resource e. average cost of hiring a resource
Rent controls can cause distortions in resource allocation by
a. causing too many resources to be devoted to housing b. creating a surplus of housing c. creating incentives toward home ownership rather than renting d. causing too few resources to be devoted to housing e. decreasing the demand for rental units
Suppose that a nation has adopted a fixed exchange rate with another country, and has a persistent trade deficit. What is most likely to happen?
a. a gradual increase in the value of its currency b. a gradual decrease in the value of its currency c. a "run" on its currency and a sudden appreciation d. a "run" on its currency and a sudden devaluation