Prisoners sometimes determine a single good to be used as money. This good becomes
a. a medium of exchange and a unit of account.
b. a medium of exchange, but not a unit of account.
c. a unit of account, but not a medium of exchange.
d. neither a unit of account nor a medium of exchange.
a
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Implementing a regional free-trade agreement may have an effect in which, due to reduced tariffs, a nation in the agreement begins to import a product it had previously produced itself. This effect is called:
a. trade creation. b. trade diversion. c. reciprocal trade agreements. d. the employment effect of FTAs.
One assumption of the basic model of supply and demand is that:
A. buyers and sellers have enough information to make informed choices. B. buyers and sellers will benefit equally from a voluntary transaction. C. sellers will always have more information than buyers. D. buyers will always have more information than sellers.