The functions of money are to serve as a:
Determinant of consumption, investment, and government spending
Resource allocator, method for accounting, and means of income distribution
Factor of production, exchange, and aggregate supply
Unit of account, store of value, and medium of exchange
Unit of account, store of value, and medium of exchange
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Which of the following would increase household saving and thus equilibrium investment spending?
a. A reduction in the investment tax credit. b. An increase in the corporate profits tax. c. A decrease in the capital gains tax. d. An increase in the investment tax credit. e. An increase in government regulation.
Models that that require knowledge of the relevant history to reach a conclusion are referred to as:
A. deductive models. B. mathematical models. C. path-dependent models. D. codependent models.
Psychological incentives:
A. are not important in non-economic settings. B. never serve as commitment devices. C. can serve as commitment devices. D. are not important in economic settings.
Present value is best defined as the:
A. worth or value today of future expected returns or costs. B. worth in the future of a current flow of returns or costs. C. current worth of a financial asset purchased in the past. D. expected future value of a financial asset purchased today.