The Soviet government in the 1980's never abandoned the ruble as the official currency. However, the people of Moscow preferred to accept
a. cigarettes in exchange for goods and services, because they were convinced that cigarettes were going to soon become hard to come by.
b. American dollars in exchange for goods and services, because rubles were extremely hard to come by.
c. goods such as cigarettes or American dollars in exchange for goods and services, reminding us of the fact that government decree by itself is not sufficient for the success of a commodity money.
d. All of the above are correct.
c
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In the above figure, by increasing its output from Q1 to Q2, the firm
A) reduces its marginal revenue. B) increases its marginal revenue. C) decreases its profit. D) increases its profit.
The inability of the Federal Reserve to explain movements in M1 demand has led to
A) less emphasis on money growth as a policy tool. B) the Federal Reserve's targeting V1 growth more closely. C) the Federal Reserve's switching to M2 and M3 targets. D) All of the above.
The cost of maintaining unemployment below its natural rate with expansionary government policy is: a. increasing inflation
b. decreasing inflation. c. always a larger federal deficit. d. always a smaller federal deficit.
Using the income approach, net interest is included because
A. households both receive and pay interest. B. households pay but do not receive interest and firms receive but do not pay interest. C. firms pay but do not receive interest and households receive but do not pay interest. D. it is income to the government but not to households nor firms.