Money is functioning as a standard of value when you
A. Buy jeans at the mall.
B. Buy a rare baseball card that you expect will increase in value.
C. Use it to compare two houses that are different prices.
D. Trade a cup of sugar for two eggs.
Answer: C
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If the Federal Reserve wanted to change the money supply in the economy, it would be least likely to
A) change the federal funds rate. B) sell bonds on the open market. C) change the level of reserves required to be held by banks. D) buy bonds on the open market.
Suppose the total revenue curve is derived from a particular linear demand curve. That demand curve must be:
A. inelastic for price declines that increase quantity demanded from 2 units to 3 units.
B. elastic for price declines that increase quantity demanded from 5 units to 6 units.
C. inelastic for price increases that reduce quantity demanded from 4 units to 3 units.
D. elastic for price increases that reduce quantity demanded from 4 units to 3 units.