The main difference between paper money and coins as forms of money is that
A. paper money issued by the Federal Reserve Board is backed by gold while coins are not.
B. paper money serves as a unit of account while coins do not.
C. the metal in coins is more durable than paper.
D. the metallic content of coins makes them more acceptable as money.
Answer: C
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An appropriate Keynesian response to a recessionary gap is to: a. decrease net taxes
b. decrease government spending. c. increase interest rates. d. increase the cash reserve ratio.
Market failure will most likely arise from poor information when the product is
a. a repeat-purchase item. b. easily evaluated on inspection. c. often purchased from the same seller. d. unlikely to be purchased from the same seller in the future.
Buyers and sellers in the foreign exchange market negotiate an exchange of
A. foreign banks. B. foreign stocks. C. foreign government bonds. D. currencies of various countries.
Assume health insurance is provided universally by the government. This would
A) force every taxpayer to bear the costs of adverse selection. B) force every taxpayer to bear the costs of moral hazard. C) force the government to deal with adverse selection problems. D) force foreign governments to deal with moral hazard problems.