The fact that money can be exchanged for goods reflects money's role as a
A) cause of inflation.
B) medium of exchange.
C) unit of account.
D) store of value.
B
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John has been a sky diver for many years. When the company John works for offers its employees the option to purchase a life insurance policy, John purchases a policy. This illustrates the problem of
a. moral hazard. b. adverse selection. c. risk-return tradeoff. d. diversification.
Consider a factory that emits chemicals into a river, thus polluting the water supply of a downstream community. The Coase Theorem states that the socially optimal, or efficient, solution can be achieved by assigning property rights to _____________________.
a. the company. b. the community. c. the company and the community, jointly. d. the company or the community. e. a government regulator.
Will a rightward shift in aggregate demand result in long-run economic growth? Why?
What will be an ideal response?
The twin responsibilities of the Federal Reserve are:
A. to print money and ensure price stability. B. to ensure price stability and regulate international trade. C. to maintain full employment and balance the federal budget. D. to ensure price stability and maintain full employment.