Are checking accounts money?
A. No, because checking accounts cannot be traded for goods and services.
B. Yes, because checking accounts can be used to buy goods and services.
C. No, because checking accounts are not physical money.
D. Yes, because the value of a checking account is measured in dollars.
Ans: B. Yes, because checking accounts can be used to buy goods and services.
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U.S. firms can produce and sell electric fans for $25. The United States can also import electric fans from China at $40 each and from Canada at $45 each. Electric fans made in the United States, China, and Canada are identical. Currently, the United States imposes a 30% tariff on imported electric fans. Now suppose that the United States forms a free-trade area (NAFTA) with Canada and Mexico. From which country will the United States import fans?
a. China b. Canada c. It will import fans from neither China nor Canada. d. It will import fans from both China and Canada.
It may be misleading to call water a necessity because
A) the amount of water a community consumes does not vary with the price people must pay for water. B) the demand for water does not obey the law of demand. C) the demand for water is highly elastic. D) the demand for water is highly inelastic. E) there are many uses of water for which good substitutes exist.