The three functions of money are
A) store of value, medium of exchange, payment specie.
B) store of value, unit of account, bank settlement.
C) store of value, unit of account, to regulate the economy.
D) store of value, unit of account, medium of exchange.
D
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Horizontally summing different supply curves assumes
A) that individual firms cannot influence the good's price. B) that all firms operate in collusion. C) that only firms who volunteer are included in the summation. D) all firms produce the same amount of output.
According to the modern view, the impact of expansionary monetary policy will
a. be the same in the long run as in the short run. b. be the same regardless of whether the effects of the policy are anticipated or unanticipated. c. initially be an increase in real output if the policy is unanticipated, but in the long run, the primary result will be a higher price level (inflation). d. initially be an increase in prices if the policy is unanticipated, but in the long run, the primary result will be larger real output.
When the government runs a deficit, it will:
A. raise taxes immediately. B. buy bonds to finance the deficit. C. sell bonds to finance the deficit. D. reduce the money supply to finance the deficit.
Suppose there is an increase in tax payments, T, of $300 billion in this economy. Given your consumption function and no other changes, what is the change in consumption given this change in tax payments?
Consider an individual consumption function, which is the standard textbook consumption function, that is, has a y-intercept of autonomous consumption and is linear in the disposable income. Assume that the slope of this consumption function equals 0.7, and that the autonomous consumption equals $20 billion in the aggregate economy.