In the United States, the purchasing power of money is determined by:
a. the underlying precious metals that back each unit of currency.
b. the value of U.S. treasury bonds that back each unit of currency.
c. its acceptability.
d. Congress, which controls the money supply.
QUESTION 2It is possible for the balance of trade to be negative, and the current account to be positive.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3Suppose consumers and business decision makers become more optimistic about the future, and aggregate expenditures increase. The most likely result is that:
a. real GDP and employment and income to decline.
b. real GDP and employment rise.
c. real GDP rises and employment falls.
d. real GDP falls and employment rises.
QUESTION 4Which of the following defines the store of value function of money?
a. A common measurement of the relative value of different goods and services.
b. The ability of money to hold value over time.
c. That the materials used to manufacture money are of medium grade or quality, so that people will not hoard money for its commodity value.
d. That money is widely accepted in exchange for goods and services.
QUESTION 5The U.S. balance of trade has been in a large surplus since 2001.
a. True
b. False
Indicate whether the statement is true or false
Quick Reply
