Compared to a barter economy, using money increases efficiency by reducing
a. transaction costs.
b. the need to exchange goods.
c. the need to specialize.
d. inflation.
A
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The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, the equilibrium output will be
A) 2,000 tons. B) 3,000 tons. C) 4,000 tons. D) 5,000 tons.
When the social costs exceed the private costs, economists state that there is
A) a positive externality. B) an underproduction of output. C) a negative externality. D) social appreciation of resources.
If the Fed believes the natural rate of unemployment is 5.5 percent and the natural rate is really 5 percent, what is likely to happen in the short run?
a. The Fed will allow unemployment to be unnecessarily high and output to be unnecessarily low. b. The Fed will allow unemployment to be unnecessarily high, but output will remain at potential. c. The Fed will allow unemployment to be unnecessarily low and output to be unnecessarily high. d. The Fed will allow output to be unnecessarily low, but unemployment will remain at the natural rate. e. The Fed will allow unemployment to be unnecessarily low and output to be unnecessarily low.
Increasing the quantity of a pure public good can be done at zero cost.
A. True B. False C. Uncertain