People living in the town of Norwich, England, have begun a system of trade called the LETS, which allows people to enter into exchanges without using the British pound. Members offer a particular service, such as babysitting, gardening, and plumbing for which they get Croy credits. They can then use these Croys to buy services from other people. Does this system represent what economists call barter?
A. No, to be true barter, the exchange rate between the Croy and the British pound must be flexible.
B. Yes, because the Croy is not real money but just a bookkeeping account.
C. Yes, because it does not use the true money, the British pound.
D. No, this group has merely replaced one money, the pound, with a less flexible medium of exchange that they call the Croy.
Answer: D
You might also like to view...
If the geography hypothesis holds, what will be its implication on poorer nations that have unfavorable geographic conditions?
What will be an ideal response?
Which of the following is least likely to be included in a definition of basic human needs?
a. A minimal level of clothing b. A minimal level of health care c. A minimal level of savings d. A minimal level of shelter e. A minimal level of calorie intake
Holding all other factors constant, which of the following does not shift the demand curve rightward?
(a) An increase in income considering it is a normal good. (b) A fall in the price of a substitute. (c) An increase in the number of buyers. (d) (a) and (c).
If Olivia's income increases from $40,000 to $50,000 and her tax liability increases from $6,000 to $9,000, which of the following is true?
a. Her marginal tax rate is 18 percent in this range. b. Her marginal tax rate is 30 percent in this range. c. Her average tax rate was 22.5 percent when her income was $40,000. d. The tax structure must be regressive in the range between $40,000 and $50,000.