What does it mean that a currency has been designated legal tender? How important is the designation?
What will be an ideal response?
If a currency is designated legal tender means the government has stated the paper money is a valid and legal means of payment of any debt that was contracted in that currency. Public acceptance of currency is more important than the government designation, but government agencies sometimes insure deposits at commercial banks and thrifts, furthering the acceptance by the general public.
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Use the NBER data in Table 8.1 in the textbook on U.S. business cycle turning points to calculate:
a) the shortest business cycle from peak to peak; b) the shortest business cycle from trough to trough; c) the longest business cycle from peak to peak; and d) the longest business cycle from trough to trough.
A sudden decrease in the market demand in a competitive industry leads to
a. Losses in the short-run and average profits in the long-run b. Above average profits in the short-run and average profits in the long-run c. New firms being attracted to the industry d. Demand creating supply
With a negative income tax featuring an $8,000 minimum level of income and a 20% tax rate, a household earning $8,000 dollars would receive a subsidy of:
a. zero b. $1,600 c. $6,400 d. $8,000
Frank owns a dog-grooming business. Which of the following costs would be implicit costs? (i) dog shampoo (ii) rent on the storefront (iii) wages Frank could earn as a substitute elementary-school teacher (iv) interest that Frank's money was earning before he spent his savings to set up the dog-grooming business
a. (i) and (ii) only b. (iv) only c. (iii) and (iv) only d. (i), (ii), (iii), and (iv)