Because Federal Reserve Notes (paper currency) are legal tender
A) U.S. creditors must accept them in payment of debts.
B) U.S. workers must accept them as payment for labor services.
C) U.S. firms must accept them as payment for goods and services.
D) All of he above are correct.
A
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Many residents of the city of Adelphia drive without automobile insurance. Assuming that Adelphia is just like any other city and these are risk averse individuals, which of the following is most likely TRUE?
A) Economic models do not work. B) These people maximize wealth. C) The price of automobile insurance exceeds their maximum value of insurance. D) There are no automobile accidents or thefts in the city of Adelphia.
Your mayor wants voters in your town to approve a $24 million per year property tax break for Acme Manufacturing, in order to keep Acme from moving their operations out of state. Acme only produces output, and has a payroll, worth $6 million per year. In terms of income multiplier effects, under what circumstances might this tax break be a good idea?