The use of money contributes to economic efficiency because:
A. governmental direction of the production and distribution of output can be avoided by using
money.
B. roundabout production could not occur without the availability of money.
C. it is necessary for the creation of capital goods.
D. it promotes specialization by overcoming the problems with barter.
Answer: D
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Say's Law implies that:
A. Wages and prices are fixed. B. Full employment equilibrium is unlikely. C. Whatever is produced will be sold. D. Unemployment causes inflation.
The real interest rate is:
A. adjusted for inflation. B. the interest rate paid to savers. C. the interest rate charged to borrowers. D. the reported interest rate, not adjusted for inflation.
The market for bagels contains two firms: BagelWorld (BW) and Bagels'R'Us (BRU). The owners of the two firms decide to fix the price of bagels. The table below shows how each firm's profit (in dollars) depends on whether they abide by the agreement or cheat on the agreement. 
Suppose the game above is repeated every day, and both firms adopt the following strategy: cooperate on the first day, then if the other firm cheats, cheat the next day, and if the other firm abides, abide the next day. This type of strategy is known as: ________.
A. the cartel solution B. a tit-for-tat strategy C. a prisoner's dilemma D. the golden rule
Holding other things constant, increases in the price level in the US will
a. Cause the dollar to gain value b. Cause the dollar to lose value c. Does not affect the dollar value d. None of the above