When you deposit $200 in your savings account with the objective of withdrawing it later to buy a video game that is about to be offered in the market in the near future, then the $200 is serving which function?
A. Store of wealth
B. Medium of exchange
C. Store of real assets
D. Unit of account
Answer: A
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Higher rates of inflation reduce spending because:
A. the Fed reacts to the higher inflation by lowering interest rates. B. the real value of money increases. C. the reduction in wealth, resulting from the reduced real value of money, restricts spending. D. resources are redistributed from low-spending households to high-spending households.
Which of the following countries had the highest GDP per capita in 2014?
A) Norway B) United States C) Japan D) Qatar
Suppose the economy is in equilibrium with an output gap equal to zero and the actual inflation rate equals the expected inflation rate
If the economy experiences a negative demand shock, real GDP will become ________ potential GDP and the economy will move to the ________ along an existing Phillips curve. A) greater than; right B) greater than; left C) less than; right D) less than; left
Which of the following is a legal way to reduce the price problems oligopolies face?
A. Collusion B. Formation of cartels C. Price leadership D. Merging to become monopolists