The people of the Island of Yap used stones as a general medium of exchange. Therefore,
A) their economic system was based upon barter.
B) their stones served as money.
C) they had no price system, because prices can't be measured with stones.
D) inflation was impossible.
B
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Historically, real income per person:
A. barely changed at all until the 1800s but began to increase after. B. barely changed at all until the 1500s but began to increase after. C. has steadily increased at an average rate of 2 percent D. has barely changed at all worldwide.
What is the maximum amount of good X that can be purchased if X and Y are the only two goods available for purchase and Px = $10, Py = $20, Y = 5, and M = 400?
A. 40 B. 80 C. 30 D. 20
"High-income countries have a price level which is much higher than the low-income countries." Which of the following is most likely to explain this price differential?
A. Prices of non-traded goods and services are relatively stable across high- and low-income nations. B. Traded goods are much more sensitive to the income levels than are non-traded goods and services. C. With the development process of a nation, its productivity in making traded goods rises much faster than that in making non-traded goods. D. Labor involved in production of non-traded goods and services in high-income nations receives lower wages than the labor-producing traded goods.
Wealth
A) is the same as income. B) includes assets such as houses, stocks, and bonds. C) does not include tangible objects. D) is a flow and not a stock.