As inflation rates increase, money becomes less useful as a:
A. unit of account.
B. store of value.
C. medium of exchange.
D. double coincidence of wants.
Answer: B
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If expected inflation is constant, then when the nominal interest rate falls, the real interest rate
a. falls by more than the change in the nominal interest rate. b. falls by the change in the nominal interest rate. c. rises by the change in the nominal interest rate. d. rises by more than the change in the nominal interest rate.
The instrumental variables in the two stage least squares estimation method consists of endogenous variables appearing in either equation.
Answer the following statement true (T) or false (F)
Internationalization of the debt refers to a situation in which the deficit is financed by foreigners:
A. buying the debt, so that crowding out is increased. B. selling the debt, so that crowding out is increased. C. buying the debt, so that crowding out is avoided. D. selling the debt, so that crowding out is avoided.
Consumer surplus is the:
a. number of consumers who are excluded from a market because of scarcity. b. amount of a good that consumers will buy at a price below the equilibrium price. c. amount consumers are willing to pay for a good minus the amount the consumers actually pay for it. d. amount consumers are willing to pay for a good minus the cost of producing the good.