Which of the following best explains the difference between commodity money and fiat money?
A. Fiat money has no value except as money, whereas commodity money has value independent of its use as money
B. all money is commodity money, as it has to be exchanged for gold by the central bank
C. commodity money has no value except as money, where as fiat money has value independent of its use as money
Ans: A. Fiat money has no value except as money, whereas commodity money has value independent of its use as money
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Which of the following is necessary for allocative efficiency to be achieved?
A) Marginal benefit must be maximized. B) Marginal cost must be minimized. C) Marginal benefit must equal marginal cost. D) The difference between marginal benefit and marginal cost must be maximized. E) Production must be at a point inside the production possibilities frontier.
Refer to Table 6-3. Over what range of prices is the demand inelastic?
A) between $12 and $16 B) over the entire range of prices C) between $8 and $16 D) between $2 and $8
A monetary aggregate is a measure of
A) the inflation rate. B) the total economic activity of the country. C) money broader than currency. D) definitive money.
If the interest rate is 5 percent, $100 received at the end of seven years is worth how much today?
A. 100 B. 100/(0.05)7 C. 100/(1 + 5)7 D. 100/(1 + 0.05)7