Question 39 Which of the statements below is true? Oa. Money in the economy increases transaction costs Ob. Money in the economy worsens the problem of the double coincidence of wants Oc Money in the economy eliminates the problem of the double coincidence of wants Od. Money in the economy has no effect on transactions costs or the double coincidence of wants

Question 39 Which of the statements below is true? Oa. Money in the economy increases transaction costs Ob. Money in the economy worsens the problem of the double coincidence of wants Oc Money in the economy eliminates the problem of the double coincidence of wants Od. Money in the economy has no effect on transactions costs or the double coincidence of wants

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter25: Money, Banking, And The Federal Reserve System

Section: Chapter Questions

Problem 3P

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The characteristic of money as a store of value implies: a. Money will remain valuable from one day to the next O b. None of the Above O C. Money allows us to quote prices and record debt O d. Money is acceptable as payment for goods and services
. Three goods are produced in an economy by three individuals:Good ProducerApples Orchard ownerBananas Banana growerChocolate ChocolatierIf the orchard owner likes only bananas, the bananagrower likes only chocolate, and the chocolatier likesonly apples, will any trade between these three personstake place in a barter economy? How will introducingmoney into the economy benefit these three producers?
8:29 1 v) Cai be ustu lu purtTiast tommvultits, but TIUL services. 18) Fiat money has A) little to no intrinsic value but is backed by the quantity of gold held by the central bank. B) a great intrinsic value that is independent of its use as money C) value, because it can be redeemed for gold by the central bank. D) little to no intrinsic value and is authorized by the central bank or governmental body
The essential characteristic required before any substance can function as money is that O none of the options is correct it be issued by the government. O people accept it as money. O the supply of it be unlimited and uncontrolled. O it be backed by a precious metal.
Which od the following statement is true about money? -it makes markets more efficient than barter -it requires a double coincidence of wants -it is not part of the circular flow -it decreases the efficiency of the market compared to barter Assume that Andy and Henry, without trading with each other, will produce and consume the following number of steel bars and ketchup bottles. The Gains from Trade Without trade Person Good Production Consumption Gains from Trade Andy Steel bars 60 60 +35 Btl. Ketchup 60 60 +15 Henry Steel bars 20 20 +5 Btl. Ketchup 20 20 +5 Now, Assume that both Andy and Henry decide to specialize, and then Andy trades 25 steel bars to Henry for 75 Btls. ketchup. This outcome is shown in the table below. Compared to the result without trade, what are the gains from trade that Andy experiences when he and Henry specialize and trade? The Gains from Trade With specialization Person Good Production…
The changes in bank regulations expand the availability of credit cards so people need to hold less cash. Select one: O a. money supply decrease, money demand decrease, interest rate increase O b. money supply increase, money demand unchanged, interest rate decrease O c. money supply increase, money demand increase, interest rate decrease O d. money supply unchanged, money demand decrease and interest rate decrease O e. money supply decrease, money demand unchanged, interest rate increase
estimated that banks would be wi g w. $1 25 per transaction, while noncustomers would attempt to conduct 19 mimon uans- $1.25 actions at that price. Estimates suggest that, for every 1 million gap between the desired and available transactions, a typical consumer will have to spend an extra minute trav- eling to another machine to withdraw cash. Based on this information, use a graph to carefully illustrate the impact of legislation that would place a $1.25 cap on the fees banks can charge for noncustomer transactions. (LO3, LO4) 19. Rapel Valley in Chile is renowned for its ability to produce high-quality wine at a frac- tion of the cost of many other vineyards around the world. Rapel Valley produces over 20 million bottles of wine annually, of which 5 million are exported to the United States. Each bottle entering the United States is subjected to a $0.50 per bottle excise tax, which generates about $2.5 million in tax revenues. Strong La Niña weather patterns have caused unušually…
Fiat money has Select one: a. value, because it can be redeemed for gold by the central bank. O b. little to no intrinsic value but is backed by the quantity of gold held by the central bank. C. a great intrinsic value that is independent of its use as money. O d. little to no intrinsic value and is authorized by the central bank or governmental body. Clear my choice Fini
1. Name & explain the three advantages of a monetary economy.
11. People view cell phone and its charger as complements to one another. If the price of cell phone increases, economists would expect: O The demand for charger will not change. O The demand for charger to increase. O The quantity of cell phone demanded to increase O The demand for charger to decrease. 12. Which one is not the role of the Fed? O The Fed also acts as a bank to the American citizens with net wealth is larger than 10 million dollar. O The Fed also acts as a bank to other banks by clearing checks, making electronic payments, and providing the currency that American's need and use every day. O The Fed also helps to supervise and regulate the nation's banks and works to promote a stable financial system for consumers, communities, and businesses The Fed implements monetary policies that promote maximum employment and m stable prices.
Which of the following about saving deposits a-under M2 supply, they they are bank accounts that you cannot white a check from directly. generally moneyl to be kept asided. you can easily withdraw money cash from these aacounts at an automatic teller machine or back d- included in M1 money supply these are the monies held in checking accounts. they are called demand deposits or chekable deposits because the bank must give the deposit holder his money on demand when a check is written or a debit card is used c- included in M1 money supply therefore, very lliquid these are coins and bills that vcirvulate in an economy that are NOT held by the US treasury Federal reserve bank, or in any bank vaults so the cash you havae in your wallet pocket right now d- under M2 money sypplly funds that you invest in where the deposits of many investors are pooled together and invested in a safe way such as short term goverment bods.
2. What is normal goods? What is ordinary goods? Please indicate whether normal money must be ordinary money.