Which of the following is the most important advantage of using money rather than relying exclusively on barter?
A) The use of money encourages people to diversify and learn to do more things for themselves.
B) The use of money encourages people who want to exchange to become more closely acquainted.
C) The use of money lowers the cost of locating people with whom to exchange.
D) The use of money reduces opportunities for fraud and theft.
E) The use of money reduces selfishness because money in itself has no value.
C
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The quantity of money that people choose to hold depends on which of the following?
I. The price level II. Financial innovation III. The exchange rate A) I B) I and II C) I and III D) I, II, and III
The effectiveness lag is
A) the time it takes for policy makers to obtain data indicating what is happening in the economy. B) the time it takes for policy makers to be sure of what the data are signaling about the future course of the economy. C) the time it takes to pass legislation to implement a particular policy. D) the time it takes for policy makers to change policy instruments once they have decided on the new policy. E) the time it takes for the policy actually to have an impact on the economy.