Homework Clinic
Social Science Clinic => Economics => Topic started by: anjilletteb on Jun 30, 2018
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Suppose after the semester ends, you take a trip to a tropical island. Upon arriving at the island, you make a stop at one of the markets and notice that everyone is carrying around jars full of little turtles.
You also notice the person in line in front of you just paid for a bottle of rum with 6 turtles. Someone else just bought a straw hat for two turtles. Thinking back to your economics class (as painful as that may be), you would conclude that
A) turtle soup is a delicacy. B) turtles are valueless.
C) this is a barter economy. D) those little turtles are serving as money.
Question 2
Refer to the above figure. Suppose the economy is in equilibrium at point A. If rational expectations exist, an increase in aggregate demand caused by an anticipated increase in the money supply will cause the economy to
A) stay at point A. B) move to point B. C) move to point C. D) move to point D.
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Answer to Question 1
D
Answer to Question 2
C