In the United States, the purchasing power of money is determined by:
A. the underlying precious metals that back each unit of currency.
B. the value of U.S. treasury bonds that back each unit of currency.
C. its acceptability.
D. Congress, which controls the money supply.
Answer: C
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Refer to Table 4-8. Suppose that the quantity of labor supplied decreases by 40,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of labor?
A) W = $9.50; Q = 370,000 B) W = $10.00; Q = 350,000 C) W = $9.00; Q = 330,000 D) W = $8.00; Q = 390,000
When the cross-price elasticity of demand between two products is positive, the two goods are said to be substitutes
a. True b. False
Economic surplus is another term for which of the following?
a. efficiency b. consumer surplus c. social surplus d. deadweight loss
When the money market is drawn with the value of money on the vertical axis, if money supply and money demand both shift to the right
a. the price level must have risen b. the price level must have fallen. c. the price level rises if money supply shifts farther than money demand. d. the price level falls if money supply shifts farther than money demand.