25. Commodity money A) has no inherent valoc as a commodity or asset. B) tends t

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25. Commodity money A) has no inherent valoc as a commodity or asset. B) tends to have listie durability C) has an intrinsic use value in itself D) has rarely been used in the past. E) looks like any other form of money ou receive a 2.5% pay raise this year. If the rate of inflation averages 3.2% this year, then: A) Your purchasing power is rising this year ) it is impossible to tell what is happening to your purchasing power without further information C) Your purchasing power is declining this year D) Your purchasing power is unaffected by cither inflation or the pay raise. E) Your purchasing power is rising because inflation has no effect on purchasing power 27. Lowering the discount ratc A) encourages banks to make more risky loans B) encourages banks to borrow excess reserves from the Fed which encourages them to make more loans to consumers C) discourages banks from making more consamer loans D) is the opposite of charging a premium E) has no effect on the money supply 28. In 2012, Congress debated whether to extend the temporary payroll tax cut for snother year. This policy would be an example of a) An automatic stabilizer b) Monetary policy c) Discretionary fiscal policy d) Open market operations 29. Nominal income is a) The average amount of a paycheck b) The normative amount that a worker should be paid c) The dollar value of pay before being adjusted for inflation. d) The purchasing power of income e) The maximum amount a worker can be paid during a rocession. during recessions because 30, Income tax receipts tend to a) Remain unchanged: incomes fall b) Rise; incomes rise c) Fall; incomes fall d) Rise; incomes fall ) Fall; incomes rise 31. Fiat money is universally accepted in exchange: A) solely because of its usefulness and acceptability in exchange and by guarantees by a central government. B) solely because it has precious metals to back it up. C) only because it has intrinsic value as a commodity D) only because it can be converted to other forms of money E) solely because it is declared so by tradition. 32. Many economists believe that trying to balance the federal budget during a recession would A) be beneficial because people have more faith in a government that can spend within its limits B) be beneficial because raising taxes would provide the funding government needs to increase spending C) have no effect on the business cycle D) make the recession worse because it reduces aggregate demand, further slowing the economic reco 33. Inflation is defined as a A) rapid growth in the economy

Explanation / Answer

25. Commodity money has an intrinsic value and its value also comes from the material that it is made. For eg. Gold, silver , copper, nickel.

So option c)

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