Answer the following statements true (T) or false (F)
Economies cannot function without money.
The amount of national income in an economy equals the money supply in an economy.
Liquidity increases as we move from the M1 to the M2 definition of the money supply.
If gold is used as money in an economy, the money supply is easy to control.
Commodity money can be used only as a medium of exchange.
False
False
False
False
False
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If the average price of a car suddenly changes from $20,000 to $15,000, larger, more remote stores with lower prices are ________ to have a(n) ________ in the number of customers.
A) likely; increase B) not likely; change C) not likely; increase D) likely; decrease
Two variables are negatively correlated if:
A. they move in the same direction. B. they move in the opposite direction. C. their movements tend to be unrelated. D. one is simply a multiple of the other.
When Kim in Korea buys stock in GE (General Electric), NCO:
A. decreases. B. is unaffected. C. increases. D. is zero.
When an industry is characterized by technology spillover, what should the government do to ensure that the market equilibrium equals the socially optimal equilibrium?
a. Impose a tax greater than the value of the technology spillover. b. Not allow production of any product that causes a technology spillover. c. Provide a subsidy equal to the value of the technology spillover. d. Require producers to "clean up" any spillover that results from their production process.