Money in a fiduciary monetary system is backed by
A. the intrinsic value of the materials used to make the assets that serve as money.
B. assets owned by the government that are intrinsically valuable.
C. a commodity such as gold or silver.
D. the public's confidence that the assets will continue to serve as money.
Answer: D
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Under adaptive expectations theory, people expect the rate of inflation this year to be:
A. zero, regardless of the rate last year. B. the same as last year. C. the rate based on predictable and fiscal policies. D. always higher than last year.
Which of the following is not a tool of the Fed?
A) the discount rate B) reserve requirements C) open market operations D) the proportion of money held as currency
If a firm is in a perfectly competitive world but decides to charge a higher price than its competitors,
A) the firm's profits will be zero or negative, and the firm will fail in the long run. B) the firm's profits will be zero or negative, and the firm will fail in the short run. C) the firm's profits will be positive or negative, and the firm will fail in the short run. D) the firm's profits will be positive or negative, and the firm will fail in the long run.
Annual incomes of James, Jack, and Stanley are $30,000, $50,000, and $80,000 and their tax rates are 10 percent, 20 percent, and 30 percent respectively. Which tax structure is this an example of?
A. Proportional tax B. Progressive tax C. Regressive tax D. Digressive tax