If something is to serve as money it must be a store of value. This means that it must
A) be divisible.
B) be the standard by which all goods are compared in setting prices.
C) hold its purchasing power over time.
D) be liquid.
C
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What is the difference between a money price and a relative price? When the demand and supply model predicts that the price of coffee will rise, is the model predicting that the money price rises or the relative price rises?
What will be an ideal response?
The "NPV Criterion" is that a firm should invest in a new capital project if
A) the present value of the expected future cash flows is larger than the present value of the cost of the investment. B) the future value of the expected future cash flows is larger than the cost of the investment. C) financing can be secured on the basis of new bonds. D) financing can be secured on the basis of new stocks. E) financing is not necessary because there are enough liquid assets in the company's portfolio to afford the investment.