Which of the Following Is a Characteristic of Paper Money

question 192

Multiple Choice

Which of the following is a characteristic of paper money?

• A)It has a high intrinsic value.
• B)It is used in a barter economy.
• C)It is valuable because it is generally accepted in trade.
• D)It is valuable only because of the legal tender requirement.

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Definitions:

Government Intervention

This involves actions taken by a government to affect the economy beyond the basic regulation of fraud and enforcement of contracts, which can include tariffs, subsidies, and adjustments to interest rates.

Wages and Prices

The relationship between the payment workers receive for their labor and the cost of goods or services in the economy.

Rational Expectations Theory

The hypothesis that individuals form forecasts about the future based on all available information and past experiences, affecting their economic decisions.

Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a specific time period.