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1. What are the requirements for a sound financial system? 2. The great economist Milton Friedman has said that "inflation is always and everywhere

1. What are the requirements for a sound financial system? 2. The great economist Milton Friedman has said that "inflation is always and everywhere

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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1. What are the requirements for a sound financial system? 2. The great economist Milton Friedman has said that “inflation is always and everywhere a monetary phenomenon." Explain. 3. Would a peso today be worth more to you than a peso tomorrow? 4. Is inflation necessarily always a bad thing? 5. How do the disinflationary policies differ depending on the causes of inflation? 6. How does an increase in interest rates affect business? Consumers? 7. In what way can inflation distort purchasing power over time for individuals? 8. From Mishkin (2018), pp. 46: Some economists suspect that one of the reasons economies in developing countries grow so slowly is that they do not have well - developed financial markets. Does this argument make sense? 9. From Mishkin (2018), pp. 47: How do conflicts of interest make the asymmetric information problem worse? 10. From Mishkin (2018), pp. 60: In person, cigarettes are sometimes used among inmates as a form of payment. How is it possible for cigarettes to solve the "double coincidence of wants" problem even if a prisoner does not smoke? 11. An increase in the availability of credit leads to faster economic growth. Agree or disagree? Explain. 12. Discuss the implications of the central bank's changing approach on price stability. 13. What is the reason why we use general equilibrium models in monetary economics? 14. Cite two examples of major issues in monetary economics. (Use data from Ph experience) 15. What do you think the BSP is doing in response to the COVID 19 global pandemic?
Transcribed Image Text:1. What are the requirements for a sound financial system? 2. The great economist Milton Friedman has said that “inflation is always and everywhere a monetary phenomenon." Explain. 3. Would a peso today be worth more to you than a peso tomorrow? 4. Is inflation necessarily always a bad thing? 5. How do the disinflationary policies differ depending on the causes of inflation? 6. How does an increase in interest rates affect business? Consumers? 7. In what way can inflation distort purchasing power over time for individuals? 8. From Mishkin (2018), pp. 46: Some economists suspect that one of the reasons economies in developing countries grow so slowly is that they do not have well - developed financial markets. Does this argument make sense? 9. From Mishkin (2018), pp. 47: How do conflicts of interest make the asymmetric information problem worse? 10. From Mishkin (2018), pp. 60: In person, cigarettes are sometimes used among inmates as a form of payment. How is it possible for cigarettes to solve the "double coincidence of wants" problem even if a prisoner does not smoke? 11. An increase in the availability of credit leads to faster economic growth. Agree or disagree? Explain. 12. Discuss the implications of the central bank's changing approach on price stability. 13. What is the reason why we use general equilibrium models in monetary economics? 14. Cite two examples of major issues in monetary economics. (Use data from Ph experience) 15. What do you think the BSP is doing in response to the COVID 19 global pandemic?
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