Which of the following applies to money when it serves as a store of value?
I. Money is a store of value because it is an agreed measure for stating goods' prices.
II. The more stable money's value, the better it serves as a store of value.
III. When money serves as a store of value, it requires a double coincidence of wants.
A) I only
B) II only
C) I and II
D) II and III
B
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According to the U.S. Secret Service, approximately $2.6 billion of U.S. paper currency in circulation is counterfeit. Undetected counterfeit U.S. currency being held by the public both at home and abroad will impact the level of
A) M1. B) the money multiplier. C) the reserve ratio. D) commodity money.
Ceteris paribus, if bond prices rise, then
A) there is no effect on bond yields. B) bond yields will increase as well. C) bond yields will fall D) the Federal reserve must be pursuing contractionary monetary policy.
In New Keynesian macroeconomics, when marginal costs are too sticky to change in proportion to nominal aggregate demand, prices ________ and so menu costs ________ needed to explain business cycles
A) are also sticky, are B) are also sticky, are not C) are still perfectly flexible, are D) are still perfectly flexible, are not
Assuming a required reserve ratio of 8%, interest rate on reserves of 0.5%, and interest rate on loans of 4%, what is the effective cost of the reserve requirement on a $1000 deposit?
A) 0.05% B) 0.28% C) 0.32% D) 4%