Are checks and credit cards money? Explain why or why not
What will be an ideal response?
Checks are not money. Checks are instructions to your depository institution allowing for funds to be given to the entity listed on the check. Credit cards also are not money. Credit cards are ID cards that allow the user to access a previously-approved line of credit. The funds borrowed using a credit card must eventually be repaid using money.
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Suppose that Firm A cheats, and B does not. What is A's payoff from cheating?
a. 0 b. 50 c. -10 d. 25
Business-class airline tickets cost much more than coach-class tickets because, compared to householders, businesspeople's demand for travel is
a. equally elastic b. unitary elastic c. more elastic d. less elastic e. not a factor in the cost of airline tickets
The quantity theory of money is better able to
A. To explain the inflation rate in the long run B. To explain the full employment in the long run C. To explain the inflation rate in the short run
According to the Keynesian aggregate expenditures model, equilibrium and full employment:
A. always occur at the same income level of real GDP. B. may differ, but there is an automatic mechanism that directs the economy toward full-employment equilibrium. C. could never occur at the same level of real GDP. D. do not necessarily occur at the same level of real GDP.