In what sense do self-fulfilling expectations determine the acceptability of a medium of exchange?
A) People like to do what the government expects them to do.
B) People value something as money only if they believe others will accept it from them as payment.
C) People expect that money will never lose its value.
D) People expect that eventually every country will use the same medium of exchange.
B
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Long-run economic profits are most likely to be earned in
A) perfect competition and oligopoly. B) perfect competition and monopoly. C) monopoly and oligopoly. D) oligopoly and monopolistic competition. E) perfect competition and monopolistic competition.
Fast food restaurants produce a range of menu items such as hamburgers, chicken sandwiches, salads, and french fries. What fundamental economic question are they addressing by offering this range of items?
A) Why produce a variety of menu items? B) What to produce? C) Who to produce the menu items for? D) How to produce goods that consumers want?
Using graphs to illustrate the concepts, absolute advantage
A. is shown with differences in slope of a production possibilities curve; comparative advantage is shown with a lower curve. B. requires a very steep curve; comparative advantage requires a curve with a shallow slope. C. on one good requires that the slope of the production possibilities curve be steeper for that good. D. is shown with a higher production possibilities curve; comparative advantage is shown with differences in slope of the curves.
Debt can create inflation
Indicate whether the statement is true or false