In the circular-flow diagram, the goods markets are where: (a) The households purchase goods from firms; (b) Firms purchase goods from government; (c) Firms purchase goods from households; (d) The government purchases goods from households. Q.1.3 Money overcomes the problem of a double coincidence of wants inherent in the barter system through its function as a: (a) unit of account. (b) store of value. (c) medium of exchange. (d) standard of deferred payment. Q.1.4 The ________ demand for money arises out of the need to hold money as a medium of exchange. This demand for money is a function of ________. (a) precautionary; interest rates (b) transactions; national income (c) speculative; interest rates (d) precautionary; national incom

In the circular-flow diagram, the goods markets are where: (a) The households purchase goods from firms; (b) Firms purchase goods from government; (c) Firms purchase goods from households; (d) The government purchases goods from households. Q.1.3 Money overcomes the problem of a double coincidence of wants inherent in the barter system through its function as a: (a) unit of account. (b) store of value. (c) medium of exchange. (d) standard of deferred payment. Q.1.4 The demand for money arises out of the need to hold money as a medium of exchange. This demand for money is a function of . (a) precautionary; interest rates (b) transactions; national income (c) speculative; interest rates (d) precautionary; national incom

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter25: Money, Banking, And The Federal Reserve System

Section: Chapter Questions

Problem 1P

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In the circular-flow diagram, the goods markets are where:(a)The households purchase goods from firms;(b)Firms purchase goods from government;(c)Firms purchase goods from households;(d)The government purchases goods from households.Q.1.3Money overcomes the problem of a double coincidence of wants inherent in the barter system through its function as a: (a)unit of account.(b)store of value.(c)medium of exchange.(d)standard of deferred payment.
Which od the following statement is true about money? -it makes markets more efficient than barter -it requires a double coincidence of wants -it is not part of the circular flow -it decreases the efficiency of the market compared to barter Assume that Andy and Henry, without trading with each other, will produce and consume the following number of steel bars and ketchup bottles. The Gains from Trade Without trade Person Good Production Consumption Gains from Trade Andy Steel bars 60 60 +35 Btl. Ketchup 60 60 +15 Henry Steel bars 20 20 +5 Btl. Ketchup 20 20 +5 Now, Assume that both Andy and Henry decide to specialize, and then Andy trades 25 steel bars to Henry for 75 Btls. ketchup. This outcome is shown in the table below. Compared to the result without trade, what are the gains from trade that Andy experiences when he and Henry specialize and trade? The Gains from Trade With specialization Person Good Production…
A barter economy is an economy where goods and services are exchanged for money. money is exchanged for goods and services. goods and services are exchanged for other goods and services. goods and services are exchanged for liabilities.
How does money overcome the problem of barter system explain?
The problem of double coincidence of want was a huge standing block that subdued the smooth process of the barter economy. Money was introduced to solve this problem. Discuss how money was used to resolve the problem of double coincidence of want and any other problem that affected the smooth running of the barter economy ?
When in US you notice that prices are posted in dollars. This best illustrates money's function a a. a store of value. b. a medium of exchange. c. a unit of account. d. a method of barter
Indicate whether each of the following statements is True or False. In each case, give a brief explanation for your choice. If there is no explanation, then NO mark will be awarded for that answer.Q.1.1Technology is always treated as a factor of production in economic theory.(2)Q.1.2An important aspect of using money in an economy is that the process of exchange, can take place without worrying about there being a double coincidence of wants.(2)Q.1.3It is common knowledge that debit cards and cheques are perfect substitutes for money.(2)Q.1.4Free market economies are generally considered to be efficient and fair.(2)Q.1.5The term economic rent refers to the returns received by government when people use government land.
Initially, the Republic of Gorgonzola has no commercial banking system. To make trading easier and eliminate the need for barter, the government directs the central bank of Gorgonzola to put into circulation 4,000,000 identical paper notes, called guilders. The central bank prints the guilders and distributes them to the people. At this point the Gorgonzolan money supply is 4,000,000 million guilders.In order to keep the money safe, some Gorgonzolan entrepreneurs set up a system of commercial banks. When people need to make a payment, they can either withdraw their guilders or write a check on their account. Checks give the banks permission to transfer guilders from the account of the person paying by check to the account of the person to whom the check is made out. With a system of payments based on checks, the paper guilders need never leave the banking system, although they flow from one bank to another as a depositor of one bank makes a payment to a depositor in another bank.…
Money cannot serve as a medium of exchange unless it also serves as a store of value. Is this statement true or false? Explain.
Briefly discuss the inconveniences of the barter economy. Write down the functions of money? Discuss those functions based on both money-commodity and money-debt approaches.
MONETARY INSTITUTIONS (chapter 17) What are the inherent disadvantages of a barter system? Note: please do not give a copy & paste answer from Chegg. or course hero
ersonal possession of currency is prohibited in U.S. prisons, although, in practice, prisoners still exchange goods and services. U.S. prisoners used cigarettes as a medium of exchange until smoking was banned in U.S. prisons in 2003. After 2003, prisoners looked to other items on the commissary menu to facilitate exchange. In 2008, the Wall Street Journal reported that energy bars had caught on as money in some U.S. prisons. One important difference between using energy bars and using dollars as money is thatenergy bars have intrinsic value. Energy bars are an example ofcommodity money.