What does it mean that a currency has been designated legal tender? How important is the designation?
What will be an ideal response?
If a currency is designated legal tender means the government has stated the paper money is a valid and legal means of payment of any debt that was contracted in that currency. Public acceptance of currency is more important than the government designation, but government agencies sometimes insure deposits at commercial banks and thrifts, furthering the acceptance by the general public.
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Which of the following would NOT lead to crowding out?
A) Expansionary fiscal policy depreciates the exchange rate. B) Expansionary fiscal policy raises foreign income. C) Expansionary fiscal policy raises the money supply. D) Expansionary fiscal policy increases net exports.
Use the above figure. The profit-maximizing output and price is
A) 600 and $16, respectively. B) 600 and $10, respectively. C) 600 and $8, respectively. D) 800 and $10, respectively.