Problems with the Use of Commodity Money Include All of the Following

question 57

Multiple Choice

Problems with the use of commodity money include all of the following except

• A) it is expensive to produce.
• B) there is an opportunity of fraud in the production of commodity money.
• C) bits could be clipped off coins and melted down without detection.
• D) it carries a high opportunity cost because the commodity could not be diverted from other uses.
• E) there are several good substitutes.

Realize the impact of macroeconomic policies (fiscal and monetary) on aggregate demand and aggregate supply.

Comprehend the role and critiques of discretionary fiscal policy in stabilizing the economy.

Grasp the significance of expectations (rational and otherwise) in influencing the effectiveness of macroeconomic policy.

Evaluate the time-inconsistency problem and its implications for economic policy.

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