For any item (physical or financial) to be used as money, the item must be
a. a precious metal, such as gold or silver
b. accepted as a medium of exchange
c. divisible into smaller units by at least 10, otherwise most exchanges cannot occur, rendering useless the money form
d. paper (fiat) backed by a precious metal
e. portable
B
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Why does popular democracy, as defined in the U.S. Constitution, contribute to long-term economic growth and political stability?
(a) It allows regular change in the structure of the government. (b) It provides incentive to invest, innovate and invent. (c) It permits the President of the U.S. to choose fiscal policies to advance contemporary mercantilism. (d) It transfers wealth from the extremely wealthy to the desperately poor.
Because of a recession in Japan, net exports from the United States decrease by $10 billion. If the MPC is 0.75, how much less spending will occur in the U.S. economy in the second "round" of spending?
a. $17.5 billion b. $10 billion c. $7.5 billion d. $5.0 billion