Government programs aimed at stimulating personal savings:
A. increase welfare if people discount the future too heavily.
B. decrease economic efficiency if people have impulse control problems.
C. help mitigate regression to the mean in most cases.
D. are designed to take advantage of the flaws in the availability heuristic.
Answer: A
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The most direct way in which money eliminates the need for a double coincidence of wants is through its use as a
A) medium of exchange. B) standard of deferred payment. C) store of value. D) unit of account.
Which of the following defines a recession?
a. Real GDP is increasing. b. Real GDP is decreasing. c. Real GDP is below its full employment level. d. Unemployment is unusually low. e. Employment growth is positive.
Refer to the graph shown. The shift from SATC1 to SATC2 reflects:
A. diseconomies of scale. B. increasing marginal productivity. C. diminishing marginal productivity. D. economies of scale.
Answer the following questions true (T) or false (F)
1. A cash withdrawal reduces deposits, reserves, and excess reserves in the banking system. 2. Banks hold 100% of their checking deposits as vault cash to ensure that bank runs do not occur. 3. A series of bank runs in a country should have no effect on M1 as money simply moves from checking deposits to currency.