BuyFind

MACROECONOMICS FOR TODAY

10th Edition
Tucker
Publisher: CENGAGE L
ISBN: 9781337613057
BuyFind

MACROECONOMICS FOR TODAY

10th Edition
Tucker
Publisher: CENGAGE L
ISBN: 9781337613057

Solutions

Chapter
Section
Chapter 14, Problem 1SQP
Textbook Problem

Discuss this statement: “A man with a million dollars who is lost in the desert learns the meaning of money.”

Expert Solution
To determine

The meaning of money.

Explanation of Solution

The barter system was a market exchange system that existed in the ancient period. According to the barter system, one commodity is exchanged for another commodity in the market. Thus, there should be double co-incidence of needs for the exchange to take place in the market. This problem was corrected with the establishment of money. Money is anything that serves as a medium of exchange in the market, unit of account as well as the store of value in the economy. There are many forms of money such as paper currencies, metallic coins, bills, and so forth.

Thus, money is worthless on its own. It becomes worthy when it is used for the purposes stated above. However, in this case, an individual is lost in the dessert and he has a million dollars with him. However, he cannot make use of his money to do any transaction, as there is no market in the dessert, and hence the money becomes worthless. Thus, this teaches the person that money is worthless when it is not used for transaction, store of value, and unit of account purposes.

Economics Concept Introduction

Money: Money is anything that has basically three functions such as the medium of exchange, unit of account, and store of value in an economy.

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Chapter 14 Solutions

MACROECONOMICS FOR TODAY

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