What is a key advantage of money over other financial assets such as stocks, bonds, precious metals or real estate?
What will be an ideal response?
A key advantage of money, especially in its cash form, is that it is widely accepted and easy to use for transactions. Other assets, such as stocks, bonds, precious metals, or real estate must first be converted to money before they can be used to make purchases. Ease with which such assets can be converted to money without losing purchasing power is a measure of the liquidity of an asset.
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A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock. B. long-run demand shock. C. long-run supply shock. D. short-run demand shock.
From 1973 to 1995, productivity of labor in the United States
A. declined because of reduced capital formation. B. declined because of slower technological improvement. C. increased because of expanded technological improvement. D. increased because of lower gasoline prices.
Explain the weak and the strong forms of the factor-price equalization theorem and discuss their real-world relevance.
What will be an ideal response?
________ suggests that with an increase in economic prosperity, world demand will shift toward luxury goods and away from staple goods.
A. The Heckscher-Ohlin theory B. The law of convergence C. The law of demand D. Engel's law