Which of the following statements is true?
A) In Romania under Communist Party rule in the 1980s, Kent cigarettes served as a medium of exchange. This illustrates the use of Kent cigarettes as fiat money.
B) Commodity money has no value apart from its use as money.
C) In Romania under Communist Party rule in the 1980s, Kent cigarettes served as a medium of exchange. This illustrates the use of Kent cigarettes as commodity money.
D) Fiat money must be backed by gold; otherwise it is worthless.
Answer: C) In Romania under Communist Party rule in the 1980s, Kent cigarettes served as a medium of exchange. This illustrates the use of Kent cigarettes as commodity money
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A principal-agent problem arises when
a. only less-qualified workers apply for a job b. a firm must find a proxy for unobservable qualities needed in employees c. potential employees have more information about their own productivity than do prospective employers d. a customer knows little about the service provided by a business e. a customer knows little about the service provided by a business and is, therefore, given poor service
The goal of the manager of a firm is sales maximization. The firm will produce
a. the output level at which MR = 0. b. as much output as it can. c. the same output that it would if the goal was profit maximization. d. the same output that it would if the goal was cost minimization.
Which of the following statements is true?
A. Taking logarithmic of a count variable is a suitable way to model it. B. All standard count data distributions exhibit heteroskedasticity. C. The nonlinear least squares estimation aims at maximizing R2. D. Count variables cannot take on the value zero.
As interest rates rise, _____.
(A) It becomes more expensive to hold money as cash. (B) Bonds and savings accounts become less attractive for investment. (C) Firms will generally spend their wealth. (D) It becomes less expensive to hold money as cash.