Which of the following is true if a nation's official money fails to serve as a medium of exchange?
a. Nothing will replace money to help facilitate exchange.
b. There will be an increase in economic efficiency
c. Resources will divert from production to exchange.
d. Transactions costs of exchange will decrease.
e. Fewer barter exchanges will be completed.
c
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Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real GDP and current international transactions in the context of the Three-Sector-Model?
a. Real GDP falls, and current international transactions rises. b. Real GDP rises, and current international transactions remain the same. c. Real GDP rises, and current international transactions become more negative (or less positive). d. Real GDP rises, and current international transactions become more positive (or less negative). e. Real GDP falls, and current international transactions become more negative (or less positive).
A rise in the expected price level leads to an expectation that real wages will ____________, which will cause people to work __________, shifting the SRAS curve _______________
A) rise; more; rightward B) rise; less; leftward C) fall; more; rightward D) fall; less; leftward
The following data show levels of planned variables for an economy. I g = Investment; S a = Saving after taxes; G = Government spending; T = Taxation; X = Exports; M = Imports. What is the equilibrium level of domestic output?
A. Choice A
B. Choice B
C. Choice C
D. Choice D
In the short run, when the economy is at equilibrium, there (2)
What will be an ideal response?