Money serves as a standard of deferred payment, which means:
a. it acts as an intermediary between the buyer and the seller.
b. it will still hold its value.
c. it is the ruler by which other values are measured.
d. it must also be acceptable to make purchases today that will be paid in the future.
d. it must also be acceptable to make purchases today that will be paid in the future.
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An increase in the price level causes an increase in money demand because
a. people need more money to purchase the same level of goods and services. b. changes in the price level have no effect on money demand. c. people have unlimited wants. d. people need less money to purchase the same level of goods and services.
After the Fed makes an open market purchase of bonds, the deposit-creation process may continue only to the point where
a. the Fed reverses course and sells bonds b. the Fed changes the required reserve ratio c. all excess reserves have been converted into required reserves d. all required reserves have been converted into excess reserves e. the Fed raises interest rates
A firm is currently operating where the MC of the last unit produced = $64, and the MR of this unit = $70. What would you advise this firm to do?
A. Shut down. B. Increase output. C. Stay at current output. D. Decrease output.
Answer the following statements true (T) or false (F)
1) In the theory of coordination failures, shifts of the nation's long-run aggregate supply curve are the main cause of business cycles. 2) The real-business cycle theorists see aggregate supply as the "active" factor in causing business cycles and aggregate demand as a "passive" factor. 3) The "real" factors in the real-business-cycle theory include resource availability and technology. 4) The idea of coordination failures suggests the possibility of less-than-desirable price-level and real-output equilibriums in the economy.