The "medium of exchange" function of money means it is the:
a. The unit in terms of which people write contracts.
b. Barter value of a product for which a nation has a comparative advantage.
c. Unit in terms of which everything is valued and the basis for establishing relative prices between goods and services.
d. Asset individuals get for goods and services and then use later to purchase other goods and services.
e. Asset people can use to accumulate wealth.
.D
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The law of increasing opportunity cost implies that
A) producing additional units of one good results in proportionately smaller reductions in output of the other good. B) producing additional units of one good results in increasing amounts of lost output of the other good. C) the production possibilities curve will be a straight line. D) the society will be producing on its production possibilities curve.
What are the general conditions under which a fixed exchange rate makes sense for a country?
What will be an ideal response?