In a barter economy that had no form of currency, how could interest exist?
Goods would be loaned, and when the loan was repaid, it would be in a greater quantity of the goods or repaid with goods of greater value than those originally loaned. For example, if Sue borrowed five bottles of wine from Sally, the terms of the loan might dictate that Sue return six bottles.
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The tragedy of the commons refers to:
a. the plight of the common people, who are doomed to low paying jobs and discrimination. b. the fact that public resources are becoming scarce. c. the idea that what we have in common is often not why we trade. d. the idea that when everyone has free access to a resource, it will be overused and depleted.
Suppose a company expects prices in general to rise by 5%, but the price of its product rises by 2%. How will the company respond to the price change?
A) It will increase production since it's getting a higher price for the product. B) It will increase production more slowly since it's price is rising more slowly than average. C) It will reduce production since it perceives a relative decline in the demand for its product. D) It will stop production and shut down until prices rise more quickly.