What are the three functions that a commodity must fulfill to be useful as money?
What will be an ideal response?
The commodity must serve as a medium of exchange; it must provide a unit of account; and it must act as a store of value, that is, it must retain its worth in terms of other goods and services.
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The figure above shows the demand for fruit snacks. Which movement reflects a decrease in quantity demanded but NOT a decrease in demand?
A) from point a to point e B) from point a to point b C) from point a to point c D) from point a to point d
Why doesn't stabilization policy work, according to economists using the misperceptions theory?
What will be an ideal response?
The Invisible Hand Principle suggests that
a. market prices direct individuals to produce more goods. b. individuals pursuing their own interests detract from the economic well-being of society. c. there should be stronger governmental initiatives to ensure cooperation for the betterment of society. d. market forces tend to channel the actions of self-interested individuals into activities that promote the general betterment of society.
How do banks potentially make economic downturns more severe and how do economic downturns contribute to the increased failure of banks?
What will be an ideal response?