The transactions approach to measuring money relies on the role of money primarily as a
A) temporary store of value. B) standard of deferred payment.
C) unit of account. D) medium of exchange.
D
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If exchange rates are allowed to fluctuate freely and the US demand for Japanese yen increases which of the following will happen?
a. the US balance of trade deficit will worsen in the long run b. Americans will have to pay more for Japanese goods c. It will be more expensive for the Japanese to buy American real estate d. the dollar will appreciate e. more Americans will want to travel to Japan
If two identifiable markets differ with respect to their price elasticity of demand and resale is impossible, a firm with market power will
A) set a higher price in the market that is more price elastic. B) set a lower price in the market that is more price elastic. C) set price so as to equate the elasticity of demand across markets. D) set price equal to marginal cost in both markets.