When the Soviet Union Began Breaking Up in the Late

question 102

True/False

When the Soviet Union began breaking up in the late 1980s, cigarettes began replacing the ruble as the medium of exchange, even though the ruble was legal tender. The cigarettes provide an example of fiat money.

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Definitions:

Employment Level

Refers to the total number of people currently employed in the economy, indicative of its health and labor market status.

Price Level

An index that measures the average prices of goods and services in an economy at a given time.

AS Curve

The Aggregate Supply curve, depicting the total supply of goods and services that firms in an economy will produce at different price levels.

Classical Theory of Employment

An economic theory that posits that the economy naturally operates at a level of full employment due to the flexibility of prices and wages.