Related to the Economics in Practice on p. 509: In Santa Cruz, red feathers from the Scarlet Honeyeater bird were used as currency. Assume the value of one pig was 50 rolls of feathers. In this instance, the feathers would be considered a(n)
A. legal tender.
B. unit of account.
C. store of value.
D. medium of exchange.
Answer: B
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The primary reason that money is demanded is for: a. transaction purposes
b. asset purposes. c. precautionary reasons. d. investment purposes.
Refer to the figure below.
If a price ceiling were imposed at point G, then excess demand would be measured by the distance between points:
A. K and I B. F and I C. G and I D. F and K
Figure 10-7
In Figure 10-7, through which point must a horizontal demand curve pass to yield a long-run equilibrium?
a.
A
b.
B
c.
C
d.
All of the above is correct.
In the circular flow model, savings is considered a leakage because
A. it does not get counted toward an individual’s accumulated wealth. B. it becomes an input toward venture capital C. it contributes to the budget surplus. D. it is the amount that consumers do not spend of their disposable income.