The goldsmith's ability to create money was based on the fact that:
A. consumers and merchants preferred to use gold for transactions, rather than paper money.
B. the goldsmith was required to keep 100 percent gold reserves.
C. withdrawals of gold tended to exceed deposits of gold in any given time period.
D. paper money in the form of gold receipts was rarely redeemed for gold.
Answer: D
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If an economy at the equilibrium level of GDP experiences an increase in the amount of investment spending, then inventories will be
A. depleted, causing firms to cut production. B. accumulated, causing firms to cut production. C. depleted, causing firms to increase production. D. accumulated, causing firms to expand production.
The American Bar Association administers the bar examinations that prospective lawyers must pass before being allowed to practice law. The exam system thus allows the ABA to act like a
a. monopsony. b. union that can restrict the supply of lawyers. c. union that can increase the number of lawyers. d. None of the above is correct.
The bond demand curve slopes downward because:
A. as bond prices fall bonds are less attractive. B. as bond prices fall so do yields. C. as bond prices rise yields increase. D. at lower prices the reward for holding the bond increases.
Featherbedding refers to
A) training programs initiated by the unions to make the less-skilled workers more productive. B) attempts by management to reduce workers' interest in a union. C) the practice that forces employers to use more labor than they would otherwise. D) the amount of the union premium.