In a fiduciary monetary system
A) coins get their value from the precious metals of which they are made.
B) money gets its value from the confidence that the public has in its acceptability.
C) paper currency does not have value, but balances in checking accounts do.
D) checking account balances do not have value, but paper currency does.
B
You might also like to view...
In an open economy with fixed exchange rates, monetary policy is most effective at increasing real income if
A) capital mobility is high. B) capital mobility is low. C) capital mobility is perfect. D) monetary policy is ineffective with fixed exchange rates.
Refer to Figure 10.8. Other things equal, a decrease in the nominal interest rate on money would best be represented by
A) a movement from point A to point C. B) a movement from point A to point D. C) a shift from LM1 to LM2. D) a shift from LM2 to LM1.