Money enables us to make comparisons of value among goods and services. This is the ________ use of money.
A. inflation fighting
B. store of value
C. standard of value
D. medium of exchange
Answer: C
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In the simple Keynesian model (no money market) assume that equilibrium output falls short of potential output by 300 units and the MPC = 0.8 . The size of the tax cut needed to reach full employment is
a. 30. b. 60. c. 75. d. 300.
When the Fed raises the discount rate, it
a. lowers the cost of borrowing from the Fed, allowing banks to make more loans b. raises the cost of borrowing from the Fed, disallowing banks from making the same quantity of loans c. increases the amount of excess reserves that banks hold, allowing them to make more loans d. increases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans e. decreases the amount of excess reserves that banks hold, disallowing them from making the same quantity of loans
Checkable deposits are money because they are:
a. Acceptable as payment b. Fiat money c. Token money d. Legal tender
Refer to the above graph showing the market for a product. Which of the following could not explain the indicated increase in equilibrium price from P 1 to P 2?
An increase in consumer incomes An increase in production costs An increase in the price of a substitute product A decrease in the price of a complementary product