A disadvantage of the barter system is that
A. people must produce all their own food, clothing, and shelter.
B. the opportunity to specialize is greatly reduced.
C. no trade occurs.
D. gold is the only unit of account.
Answer: B
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In the United States, the Lorenz curve for wealth is ________ from the 45-degree line than is the Lorenz curve for income, which means that the distribution of wealth is more ________ than the distribution of income
A) farther away from; unequal B) farther away from; equal C) closer to; unequal D) closer to; equal
The money supply is $6 million, currency held by the nonbank public is $2 million, and the reserve—deposit ratio is 0.1. The monetary base is equal to
A) $2 million. B) $2.4 million. C) $2.6 million. D) $4 million.
In graphical form, the presence of an external benefit that is ignored by consumers can be shown as
A) a market demand curve to the left of the market demand curve for which the consumers take the external benefit into account. B) a market demand curve to the right of the market demand curve for which the consumers take the external benefit into account. C) a market demand curve the same as the market demand curve for which the consumers take the external benefit into account. D) the absence of a market demand curve.
Traditionally, the major objection to flexible rates was that they ______.
a. introduce considerable uncertainty into international trade b. were controlled solely by the U.S. government c. require special financial borrowings or reserve movements d. can result in currency shortages