Which of the following functions of money allows us to not rely on the barter system to get the goods and services we need?
Answer: medium of exchange
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Everything else held constant, in the market for reserves, when the federal funds rate is 3%, lowering the interest rate paid on excess reserves rate from 2% to 1%
A) lowers the federal funds rate. B) raises the federal funds rate. C) has no effect on the federal funds rate. D) has an indeterminate effect on the federal funds rate.
Contrast the appropriate Keynesian response in an economy experiencing recession with the appropriate Keynesian response in an economy experiencing inflationary pressures
Answer the following questions true (T) or false (F)
1. An inferior good is a good for which the quantity demanded increases as the price decreases, holding everything else constant. 2. The substitution effect explains why there is an inverse relationship between the price of a product and the quantity of the product demanded. 3. If consumers believe the price of hybrid vehicles will decrease in the future, this will cause the demand for hybrid vehicles to decrease now.
Betty is out on a first date with Barney. She decides to order the garden salad with dressing on the side in an effort to make a good first impression, even though she prefers leg of lamb. Economic theory:
A. would suggest that she values what Barney thinks of her and will derive negative utility if she does not impress him. B. would suggest that making a good impression with her choice will bring her more utility than ordering lamb and making a bad impression. C. cannot explain why someone would choose a meal that brings her less utility than another. D. cannot be used to explain matters of the heart.