Buying a cup of coffee with a dollar bill represents the use of money as a
medium of exchange
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What three factors that were critical to economic prosperity did Adam Smith observe, and later publish in The Wealth of Nations?
What will be an ideal response?
By acting as a lender of last resort during a bank panic, the Federal Reserve enables banks to
A) encourage the public to borrow directly from the Fed to alleviate the panic. B) call in their loans from their customers to restore faith in the banking system. C) borrow increasingly large amounts from the Fed, which will reduce the public's faith in the banking system. D) satisfy customers' desires to withdraw money and eventually restore the public's faith in the banking system.
Of the many arguments in favor of tariffs, the one that has enjoyed significant economic justification has been the
A) cheap foreign labor argument. B) infant industry argument. C) even playing field argument. D) balance of payments argument. E) domestic living standard argument.
Refer to the figure above, which shows domestic supply and demand. If P1 is equal to P2 (the world price) plus a tariff, then the social loss from the tariff is equal to
A) a + c B) b C) P1 ( Q3 - Q2 ) D) P2 [(Q2 - Q1 ) + (Q4 - Q3 )] E) a + b + c