Commodity money is
a. backed by gold.
b. the principal type of money in use today.
c. money with intrinsic value.
d. receipts created in international trade that are used as a medium of exchange.
c
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Suppose you are told that the equilibrium price of gasoline has increased, while the equilibrium quantity of gasoline has fallen. You are also told that either the demand changed or supply changed, but not both
Which of the following must have occurred? A) Demand increased. B) Demand decreased. C) Supply increased. D) Supply decreased.
It is possible for an economy to increase its production of both goods if the economy
a. moves downward and to the right along its production possibilities frontier and the frontier is bowed outward. b. moves upward and to the left along its production possibilities frontier and the frontier is bowed outward. c. moves in either direction along its production possibilities frontier and the frontier is a straight line. d. moves from a situation of inefficient production to a situation of efficient production.
The option holder is:
A. the buyer of an option. B. always a speculator. C. another name for the clearinghouse used in futures contracts. D. the seller of an option.
(Advanced analysis) Assume that the MPC is .8 in an economy that has an aggregate supply curve with a slope of 1. Also, suppose that the price level is flexible downward. A decrease in investment spending of $10 billion will shift the aggregate demand
curve leftward by: A. $50 billion and decrease real GDP by $50 billion. B. $50 billion and decrease real GDP by $25 billion. C. $10 billion and decrease real GDP by $10 billion. D. $10 billion and decrease real GDP by $25 billion.