What is a problem with barter that makes it so difficult to use?
A) Individuals have to produce something to trade with.
B) Barter omits the store of value role for money.
C) Barter requires use of only fiat money.
D) Barter requires a double coincidence of wants.
E) Barter is very efficient but illegal because it avoids taxation.
D
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What criteria should be used in deciding the best definition of the money supply?
What will be an ideal response?
Suppose we were analyzing the Turkish lira per euro foreign exchange market. If there is the expectation that the euro will fall in value in the near future. As a result of speculators' actions the:spot
a. Supply of euros in the foreign exchange market falls, and the demand for euros in the foreign exchange market rises, causing an appreciation of the euro. b. Supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing an appreciation of the euro. c. Supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market rises, causing an uncertain change in the value of the euro. d. Supply of euros in the foreign exchange market rises, and the demand for euros in the foreign exchange market falls, causing a depreciation of the euro. e. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate.