Fiat money is:
A. any form of money that can be legally exchanged into a fixed amount of an underlying commodity.
B. money created by rule.
C. money used for the exchange of large commodities.
D. any form of money that is more readily accepted than commodity-backed money.
B. money created by rule.
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Which of the following is a characteristic of perfect competition?
a. substantial barriers to entry b. differentiated products c. few sellers d. none of the above
An investor who felt that the U.S. and world economies were about to improve, would be likely to
A) avoid investing in U.S. treasury bonds because interest rates would soon fall causing bond prices to rise. B) avoid investing in U.S. treasury bonds because interest rates would soon rise causing bond prices to fall. C) invest in U.S. treasury bonds because interest rates would soon fall causing bond prices to rise. D) invest in U.S. treasury bonds because interest rates would soon rise causing bond prices to fall.
If a union negotiates and obtains a wage rate above the competitive wage rate,
A) it must find a way to make workers more productive. B) employment in the union sector will increase relative to employment in the nonunion sector. C) it must find a way to ration jobs among the excessive number of workers who wish to work in the union sector. D) unemployment will increase in the nonunion sector relative to the union sector.
The most important determinant of the price elasticity of demand for a good is
A) the definition of the market for a good. B) the availability of substitutes for the good. C) the share of the good in the consumer's budget. D) whether the good is a necessity or a luxury.