The three functions of money are:
A. measuring balance of payments, exchange rates, and interest rates.
B. implementing monetary policy, fiscal policy, and structural policy.
C. spending for consumption, investment, and government purchases.
D. serving as a medium of exchange, unit of account, and store of value.
Answer: D
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Graphically, producer surplus is measured as the area
A. under the demand curve and below the actual price. B. above the supply curve and above the actual price. C. under the demand curve and above the actual price. D. above the supply curve and below the actual price.
Why are economists less worried about industry concentration than they once were?
What will be an ideal response?
Which of the following best describes the cause-and-effect chain of a restrictive monetary policy?
A. A decrease in the money supply will lower the interest rate, increase investment spending, and increase aggregate demand and GDP. B. An increase in the money supply will raise the interest rate, decrease investment spending, and decrease aggregate demand and GDP. C. An increase in the money supply will lower the interest rate, decrease investment spending, and increase aggregate demand and GDP. D. A decrease in the money supply will raise the interest rate, decrease investment spending, and decrease aggregate demand and GDP.
The corporate decision on type and level of R&D activity is difficult because:
A. the interest-rate cost of funds is difficult to estimate. B. much of corporate R&D is based on the pursuit of science, not on the profit motive. C. expected returns lie in the future and are highly uncertain. D. total returns and marginal returns greatly diverge.