What establishes the value of fiat money?
a. Our collective trust and confidence that the central government, which decrees that money cannot be refused as payment for debt.
b. Gold and silver owned by the large commercial banks.
c. The central government authority's promise to redeem fiat money for gold or silver upon demand.
d. None of the above.
a
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Product variety and information for consumers are gains from
A) perfect competition. B) monopolistic competition. C) monopoly. D) oligopoly.
Romer and Romer found evidence that money is not neutral because
A) in several episodes, such as 1979-1982, changes in monetary policy led to recessions. B) they found that inflation was highly correlated with the rate of growth of the money supply. C) if money were neutral, no one would care what the Fed does. D) they found no evidence that productivity changes or changes in government spending contributed to business cycles; only monetary changes preceded every recession.
Markets with hit-and-run entry and exit experience
A) barriers to entry. B) firms entering whenever they can make a profit and exiting when they cannot make a profit. C) steady long-run economic profit. D) a very steady number of firms.
What makes a tax "efficient"? Describe the efficiency properties of a lump sum tax
Under what conditions might a regular unit tax approximate a lump-sum tax? List one trade-off facing policymakers in attempting to minimized the excess burden of taxation.