Every Economic Model Should Include Money as a Variable

question 18

Multiple Choice

Every economic model should include money as a variable.This statement is

• A)true,because every transaction in the economy uses money.
• B)true,because the federal reserve is very important.
• C)false,because some transactions in the economy are transacted without money.
• D)false,because a model can get unnecessarily complex if it includes money.

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Definitions:

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Bank Notes

Paper money issued by a central bank, constituting a common form of legal tender in many economies around the world.

Operating Activities

Activities that constitute the primary or main activities of a company, including production, sales, and delivery of goods and services.