The value of fiat money is fundamentally determined by the:
a. reputation of the bank that holds it
b. reputation of the person who holds it.
c. value of the gold or silver for which it can be redeemed.
d. value of the commodities for which it can be traded.
e. value of comparable stocks and bonds.
d
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Draw a graph illustrating a competitive firm in short-run equilibrium that is earning an economic profit. Be sure to label all curves and axes correctly.
What will be an ideal response?
According to the theory of creative destruction, the greatest threat to a monopolist producer of electric typewriters is likely to be
a. government regulation b. international competition c. the entry of new electric typewriter producers d. growth in the computer industry e. stockholders demanding increased efficiency
Efficiency is an important social goal because:
A. movements toward economic efficiency make the total economic pie larger. B. it assures a normative outcome. C. it takes into consideration the distribution of income. D. it assures a fair outcome.
A simple linear demand function may be stated as Q = a - bP + cI where Q is quantity demanded, P is the product price, and I is consumer income. To compute an appropriate value for b, we can use observed values for Q and P and then set -b(P/Q) equal to the:
A. cross-price elasticity of demand. B. price elasticity of supply. C. income elasticity of demand. D. price elasticity of demand.