As a result of money in an economy,
A) transaction costs are higher than would be the case in a barter economy.
B) people are greedier than in a barter economy.
C) real Gross Domestic Product (GDP) and economic growth are greater than they would be in a barter economy.
D) stealing exists and people have to find ways to prevent theft.
C
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When the price of broccoli increase relative to cauliflower, people who buy fresh vegetables respond by buying more cauliflower and fewer broccoli. As a result, the CPI has
A) a quality change bias. B) a new price bias. C) a commodity substitution bias. D) an outlet substitution bias. E) a new goods bias.
Goods that are heavily taxed, such as alcohol and cigarettes, often have:
a. relatively inelastic demand, such that the tax burden falls primarily on sellers and the deadweight loss associated with the tax is smaller than if demand were elastic. b. relatively elastic demand, such that the tax burden falls primarily on sellers and the deadweight loss associated with the tax is smaller than if demand were inelastic. c. relatively inelastic demand, such that the tax burden falls primarily on buyers and the deadweight loss associated with the tax is smaller than if demand were elastic. d. relatively elastic demand, such that the tax burden falls primarily on buyers and the deadweight loss associated with the tax is smaller than if demand were inelastic.
Commodity money is paper currency that may be redeemed for a specific commodity at a specified rate on the currency.
a. true b. false
A decrease in the price of electricity can best be explained by
A. A growing economy. B. Abnormally cold winters and hot summers. C. The increased use of electronic devices such as computers. D. A decrease in the population.