The largest component of M1 is

One problem with fiat money, as compared to commodity money, is that: a. more resources are used to create fiat money

b. there is frequently too little fiat money available. c. there is a greater potential for inflation with fiat money. d. fiat money must be turned in to the government to receive the commodity on which it is based. e. fiat money is less divisible than commodity money.

Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. The opportunity cost for the United States is:

A. 5 apples for each pair of shoes. B. 5 pairs of shoes for each apple. C. 1/5 apple for each pair of shoes. D. 1 pair of shoes for every 2 apples.