Breakdown of Monetary systems

3459 WordsJan 6, 201414 Pages
Louise Hall Breakdown of Monetary systems South West Florida College Final Project Macro Economic Break down of Monetary Systems Part I (40 points) Using the given Case Study: Question 1 (10 points) In countries where the monetary system has broken down, what are some alternatives to which people have resorted to carry out exchange There are many alternatives to money. Gold for one has been the alternative for money for centuries. Gold coins are the smallest unit of currency that can actually be traded with another commodity. Since gold follows the 6 properties of ideal money (durability, Portability or Transportability, Divisibility, Uniformity, Non counterfeit ability, Acceptability…show more content…
What other characteristics can you think of that might be important to market participants? One other characteristic based on the ones I have mentioned in question 1 that might be important to market participants is that of durability. Your market participants want to know that the money being held or used by them is of a good quality and cannot be easily damaged. For example an individual may have in their possession their last money, they want to be ensured that it cannot be easily torn. Another characteristic that comes to mind is of much concern is the likelihood that a particular currency or dollar can be duplicated. If an individual so happens to be tricked and given counterfeit money, and this is discovered when the person spends such money - they may either be held liable or be told that such monies is of no value since it is not real. Issues like these are of major concern to market participants. Finally, market participants also want to know that money in there position can be easily carried around without much effort - hence this age of debit cards is one which is of much favor to many of us, since debit cards are also considered as money. One needs to note that one major advantage of carrying around a debit card is the fact that individuals feel more secure, as even if they were to be robbed, there would be little or no cash in their possession. “If an economy had only two goods (both nondurable), there would be no need for
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