When an asset is described as being highly liquid, which one of the following characteristics does it possess?
A) It earns a high rate of interest, so its purchasing power is maintained when prices rise.
B) It is easily and readily converted into money without any loss in purchasing power.
C) The face value of the asset is somewhat less than its value when converted into currency.
D) The asset holds its value over time.
B
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If more people buy hybrid cars that have high gas mileage, the equilibrium price of gasoline will ________ and the equilibrium quantity will ________
A) rise; increase B) rise; decrease C) fall; increase D) fall; decrease
Suppose, compared to last year, the price of beer has increased 4%, the price of jeans has increased 7%, and the price of video rentals has decreased 1%
On the basis of this data, what can an economist conclude about the rate of inflation in the overall economy? A) Nothing. B) The inflation rate is 4%. C) The inflation rate is 7%. D) The inflation rate is 10%. E) The inflation rate is 11%.