A car dealer sells you a car today in exchange for money in the future. This illustrates which function of money?
A) medium of exchange
B) unit of account
C) store of value
D) standard of deferred payment
Answer: D
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Discuss the relationship between poverty, growth and the environment
What will be an ideal response?
The fourth step of the four step process is to
a. identify the new equilibrium and then compare the original equilibrium price and quantity to the new equilibrium price and quantity. b. decide whether the economic change being analyzed affects demand or supply. c. draw a demand and supply model before the economic change took place. d. decide whether the effect on demand or supply causes the curve to shift to the right or to the left, and sketch the new demand or supply curve on the diagram.
Which of the following conditions describes an inflationary gap?
A. The short-run equilibrium level of real GDP is below the long-run level of real GDP. B. The short-run equilibrium level of real GDP is above the long-run level of real GDP. C. The actual interest rate is below the equilibrium interest rate. D. The actual interest rate is above the equilibrium interest rate.
If consumers believe that next year a recession will occur (in a closed economy), then the real interest rate ________ and investment ________.
A. falls; increases B. falls; declines C. rises; increases D. rises; declines