Which of the following best illustrates the medium of exchange function of money?
A. A person owes $10,000 on his or her credit card.
B. The price of a new car is $25,000.
C. A penny saved is a penny earned.
D. You pay $3 to purchase a bag of apples.
Answer: D
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A society must make three sorts of decision: what goods to produce, how to produce them, and how to distribute them.
Answer the following statement true (T) or false (F)
Assume that seigniorage and the government's primary deficit are both zero
If the real interest rate is less than the growth rate of real GDP, fiscal policy ________, and if the real interest rate is greater than the growth rate of real GDP, fiscal policy ________. A) is sustainable; may be sustainable B) is unsustainable; is sustainable C) is sustainable; is unsustainable D) is unsustainable; may be sustainable
In 1865, Congress raised the tax on state bank notes to 10 percent of the value of notes in circulation. This tax:
a. ended the dual banking system in the U.S. b. was less than the tax on national bank notes. c. was rescinded in 1870. d. was avoided through the use of deposits.
Based on these graphs, the price level remains unchanged if the tax cut has ______ on both SRAS and AD.
a. no effect
b. a small effect
c. a moderate effect
d. a large effect