If people hold onto money as cash rather than depositing it, the money multiplier will:
A. get larger.
B. stay the same.
C. be increased by the Federal Reserve.
D. get smaller.
Answer: D
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Representative commodity money retained its value because
A) it was an actual commodity. B) it was a fiat money. C) it was backed by the government. D) it could be exchanged for an actual commodity.
When tastes over current and future consumption take the Cobb-Douglas form, interest rates have no impact on savings when income is earned in the current period but not in the future.
Answer the following statement true (T) or false (F)
Figure 10-9
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Figure 10-9 shows supply and demand conditions in a perfectly competitive industry and for a firm in that industry. Assume the industry initially has supply curve S1 and demand curve D1. If demand shifts to D2, then in the short run price will
A. rise to A. B. rise to some level between A and B. C. remain at B. D. fall to C.
A unit tax has an advantage over an ad valorem tax in situations when _____
a. inflation is high b. it is easy to estimate the value of the good being taxed c. it is difficult to estimate the value of the good being taxed d. inflation is low