Barter occurs when you exchange
A) money for goods.
B) goods for money.
C) goods for other goods.
D) one type of money, such as U.S. dollars, for a different type of money, such as Japanese yen.
C
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An external market
A) should always replace internal markets. B) have problems that internal markets do not. C) should be used to discipline the internal market. D) fewer economies of scope.
Within the framework of the AS/AD model, which of the following is a true statement regarding short-run aggregate supply?
a. An increase in prices temporarily improves profit margins because important components of costs are fixed in the short run. b. An increase in prices leads to higher interest rates, which temporarily improves profit margins. c. An increase in prices leads to an expansion in the money supply, which stimulates additional output. d. An increase in prices increases real wage rates and thereby expands the size of the economy's resource base.
The ECB's focus on restraining inflation is, in large part, a result of:
A) Europe's experience with inflation during the 1960s. B) Germany's experience with hyperinflation during the period between the first and second world wars. C) the ECB's distrust of some of its smaller member countries (e.g., Finland, Portugal). D) its monetary policy having no effect on economic growth.
Prices play a role in a market
A. because they help eliminate poverty. B. because they distribute scarce goods to those consumers who value them most highly. C. because they eliminate scarcity. D. because when prices are in equilibrium, product shortages or surpluses can occur.