Cashing out capital gains in Virtual Currency System #3 (i.e., turning virtual capital gains into real world currencies) causes the nation's:
a. M2 money multiplier to remain the same.
b. M2 money supply to rise.
c. M2 money multiplier to rise.
d. M2 money supply to fall.
.A
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Market exchange is typically an exchange of goods for money, as opposed to goods for goods, because use of money solves the problem of
A) the absence of a coincidence of wants. B) the absence of a double coincidence of wants. C) a coincidence of needs. D) tax evasion.
Positive analysis:
A. aims at determining only the economic consequences of a particular policy. B. recommends whether a policy should be implemented. C. determines whether the consequences of a policy are desirable. D. depends on the analyst's values.
If a firm offers to pay a worker $10 for each hour of leisure the worker gives up, the $10 implies the:
A. marginal rate of transformation between leisure and income. B. marginal rate of substitution between leisure and income. C. market rate of substitution between leisure and income. D. market rate of transformation between leisure and income.
If the aggregate supply curve is horizontal,
A. there are unemployed resources. B. the economy is inside the production possibilities frontier. C. it is possible to increase output, without driving up prices, by putting unemployed resources to work. D. All of the choices are correct.