Money is a unit of account because:
A. goods and assets are priced in terms of it.
B. it is a store of value.
C. barter would be impossible without it.
D. it is liquid.
Answer: A
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Firms in a monopolistically competitive market will advertise because
A) they want to differentiate their products. B) they want to increase the elasticity of the demand curve. C) of the significant differences in their product over their competitors. D) the elasticity for their product is inelastic.
Moe divides his time between studying Physics and studying Economics. His production possibilities curve for his final grade in each class is shown in the accompanying figure.
Both of Moe's professors require at least a 65 to pass and a 90 to earn an A. Which of the following is true?
A. Moe can pass economics, but only if he fails physics. B. Moe can pass both classes. C. Moe can pass physics, but only if he fails economics. D. Moe could earn an A in economics and still pass physics.
If the economy is in a boom, the response lag is generally shorter for monetary policy than for fiscal policy, but if the economy is in a slump, the response lag is generally shorter for fiscal policy than for monetary policy.
Answer the following statement true (T) or false (F)
Nation Alpha has a comparative advantage in product X and nation Beta has a comparative advantage in product Y. Trade in the two products will only benefit the two nations if:
A. The exchange ratio of X for Y is fixed B. The terms of trade increase in both nations C. There is excess capacity in both economies D. The prices charged for X and Y reflect their domestic opportunity costs