Answer the following questions true (T) or false (F)
1. Innovations, including new products and services, in financial markets and institutions have made the job of defining the money supply easier.
2. Most U.S. currency held outside the U.S. banking system is held by foreigners.
3. A person's wealth is the same as his income.
1. FALSE
2. TRUE
3. FALSE
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Who ends up paying when sunk costs are incurred as a result of erroneous forecasting?
A) No one pays them because they are sunk. B) The consumer, because they eventually show up as higher prices. C) The government, since they fall evenly on the entire community. D) The taxpayer, because they produce a decline in assessed valuations. E) Whoever invested in the unsuccessful project.
The ultimate source of liquidity in a modern industrial economy is the
A) government Treasury. B) central bank. C) capital market. D) liquidity market.
Sometimes what we think is a collective consumption good only has those characteristics because of _____
a. high fixed costs. b. private production c. economies of scale d. government production
If cheese spreads and butter are substitutes, an increase in the price of butter will:
a. shift the demand curve for cheese spreads upward. b. shift the demand curve for cheese spreads downward. c. shift the demand curve for butter upwards. d. shift the demand curve for butter downward.