What would happen if money did not exist?
Exchange would still exist. We could barter goods. But barter requires a double coincidence of wants. The
number of trades taking place would be limited by the lack of a double coincidence of wants, and so we
would see less specialization and production for the market, and more jacks-of-all-trades producing mainly
for single households. With less specialization, the size of our economy would shrink.
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According to this Application, as the U.S. economy grew from the early 1990s, U.S. exports also increased as our demand for foreign products promoted growth in foreign countries. This increase in exports would tend to
A) decrease U.S. GDP and reduce unemployment in the short run. B) decrease U.S. GDP and increase unemployment in the short run. C) increase U.S. GDP and reduce unemployment in the short run. D) increase U.S. GDP and increase unemployment in the short run.
A middle-ground exchange rate regime, between fixed and floating, is NOT called:
a. a managed float. b. a dirty float. c. limited flexibility. d. a free float.