Credit card balances are not considered to be money primarily because they:
A. are not part of people's wealth.
B. are an asset used in making transactions.
C. are rarely used to make purchases.
D. do not represent an obligation to pay someone else.
Answer: A
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Which of the following is not an example of De Beers Diamonds trying to increase consumer demand?
a. sending the marketing message that a diamond lasts forever b. ads that illustrate that a diamond should remain in the family and not be sold c. informing potential customers about how diamonds lose monetary value over time d. introducing the idea of the diamond engagement ring e. the "spirit ring" as a sign of independence
A firm realizes that the market price has fallen below its average total costs, and it is now earning a loss. What is the best action for the firm to take in the short run?
A. Shut down if price is greater than average variable costs. B. Produce where MC = MR to minimize losses if P < AVC. C. Shut down if total revenue is less than fixed costs. D. Produce where MC = MR to minimize losses if P > AVC.
Shoe leather costs include the ________ due to the more frequent trips to the bank, the new cash management systems and the expanded employment in banks that inflation causes.
A. bracket creep and redistribution that occur B. time and effort that are used up C. substitution and price adjustment biases that arise D. deflating and indexing that are necessary
In economics, the purpose of competition is to:
A. ensure that every firm survives. B. motivate firms to make the highest possible profit. C. prevent unemployment. D. motivate firms to make better goods at lower cost.