What is the difference between commodity money and fiat money? Why do people accept fiat money in trade for goods and services?
Commodity money has "intrinsic value," or value in uses other than as money. Fiat money is established as money by the government. It has very little, if any, intrinsic value. Although fiat money has no intrinsic value, people accept it in trade when they are confident that others will also accept it. The government's decree that fiat currency serves as legal tender increases this confidence.
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A cartel is a collusive agreement among a number of firms that is designed to
A) expand output and lower prices but not to a predatory level. B) restrict output and lower prices to a predatory level. C) restrict output and raise prices. D) expand output and raise prices. E) expand output and lower prices to a predatory level.
China is a large open economy with an extraordinarily high saving rate
If, as seems likely, there is a decrease in desired saving in the coming years, what effects should we expect to see on China's trade balance (net capital flow), domestic real interest rate, and actual levels of saving and investment?
Corporations account for
A) the largest proportion of business revenues generated in the United States. B) the largest amount of taxes paid to the U.S. government. C) the largest number of firms in the United States. D) the smallest amount of revenues in the United States.
If an individual invests $20 in a bank deposit promising an interest of 12 percent per annum, compounded annually, he will receive $40 after 8 years
Indicate whether the statement is true or false