Though many assets can be used as a store of value, money is a particularly attractive method to store value because:
A. it increases in value as prices rise.
B. its purchasing power does not decline when prices rise.
C. it is the most liquid of all assets.
D. it is backed by gold.
Answer: C
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Suppose that last year the Consumer Price Index was 124; this year it is 130.7. What was the inflation rate between these years?
A) 30.7 percent B) 6.7 percent C) 5.4 percent D) 5.1 percent
Spencer and Brander's model highlights the conventional assumption that
A) government involvement in business or in the economy tends to fail. B) government subsidies tend to waste taxpayer's money. C) government subsidies cannot create a successfully competing export. D) government tends to distort when it displaces Adam Smith's Invisible Hand. E) government subsidies can produce profits that exceed the subsidy's value.