To compute the present value of a future value, you must know the _________ and the _________.
A. interest rate; compounding interest
B. interest rate; time period
C. compounding interest; time period
D. None of these statements is true.
B. interest rate; time period
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The "double coincidence of wants" problem is
A) resolved under a system of barter. B) always present in all economic systems. C) resolved by the use of money. D) created by the use of money.
European banks began with which of the following?
a. Churches were the first bankers, lending out cash to help the poor learn a craft. b. Monarchs were the first bankers, lending out cash to help the poor learn a craft. c. Goldsmiths were the first bankers, and the paper receipts they issued for gold held on deposit became valued as money. d. Fishermen were the first bankers, and the paper receipts they issued for fish they stored in the holds of their ships became valued as money.
As prices rise, people will buy fewer goods and services because:
A. the interest rate has declined. B. aggregate demand has increased. C. the purchasing power of the fixed quantity of money has declined. D. the income of households has increased.
Suppose that consumers become more pessimistic about the future and, as a result, reduce their consumption by $10 billion. If the marginal propensity to consume is 0.80, how will this $10 billion reduction in consumption affect the equilibrium level of real GDP?
A. Real GDP will decrease by $8 billion. B. Real GDP will decrease by $10 billion. C. Real GDP will decrease by $40 billion. D. Real GDP will decrease by $50 billion.