2. Throughout history, gold has been used as a medium of exchange. Goldingots, gold coins, gold bars, whatever.a. Why do you think other commodities were not used as a medium of exchangefor the same length of time? For example, think about why diamonds wereseldom used as money.b. Why do you think paper fiat currency replaced gold?c. Is there a transaction cost problem with paper money? If so, explain how. Ifnot, explain why not.

Here's a breakdown of why gold dominated as a medium of exchange for so long, and the rise of paper…

Answered: 2. Throughout history, gold has been…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Monetary System

Section: Chapter Questions

Problem 2QR

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Gold and silver have been historically used as materials for making commodity money (coins) by many different human cultures throughout history. This was because they were difficult to obtain and less prone to rust than other metals. In other words, they could perform one of the functions of money better than other metals. Which function is that? Which function of money do gold and silver perform better than other metals? a. Unit of account b. Store of value c. Medium of exchange d. Standard of deferred payment
#28.The primary difference between commodity money and fiat money is that a fiat money is a medium of exchange but commodity money is not. b fiat money has intrinsic value but commodity money does not. c commodity money is a medium of exchange but fiat money is not. d commodity money has intrinsic value but fiat money does not.
2. When you discover a $20 bill in your coat pocket that you placed there last winter, you find you were unexpectedly using money as a O medium of exchange. store of value. unit of account. factor of production.
In a barter system, we would see Select one: O a. many different units of money. Ob. wide-spread depository institutions. Oc. money and goods exchanged for each other. O d. goods traded directly for other goods and services.
Coursc asibdala Table 1 First Charter Bank Assets Liabilities $800 $400 $1.200 Reserves Loans Total Deposits Net Worth Total Refer to Table 1. The required reserve ratio is 25%. If the First Charter Bank is meeting its reserve requirement and has no excess reserves, its reserves equal Lütfen birini seçin: O A. $300 O B. $600 O C. SO O D. $100 O E. $200 The Italian economy can be characterized by Equation 24.1.
The value of money depends on which of the following factors? O a. The durability of the bills O b. The weight of the coin Ос. The price level O d. The previous metal used to mint the coin
Give typing answer with explanation and conclusion
Economics To increase the money supply, what could the Federal Reserve do? Choose one or more: OA. make an open market sale OB. decrease the discount rate O Cincrease income taxes OD. increase the discount rate O E. make an open market purchase
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4. Which of the following characteristics of money is associated with the base good being divisible? a. Unit of account b. Store of value c. Medium of exchange 5. Which of the following characteristics of money is associated with the base good being easily portable? a. Unit of account b. Store of value c. Medium of exchange 6. The Federal Reserve's dual mandate is that monetary policy should accomplish An effective allocation of capital and stable property rights b. A well-capitalized banking system and an empowered democracy c. A stable return on the stock market and reasonable bond yields d. Price stability and full employment а.
Trevor goes to the ATM machine and withdraws $500 in cash. How will this affect the monetary base? Select one: O a. The monetary base will decline as bank reserves fall. O b. The monetary base will increase with the increase in currency in circulation. O c. The monetary base will increase by less than the size of the withdrawal as the increase in the currency in circulation will not be completely offset by a decrease in bank reserves. O d. The monetary base will remain unchanged with the increase in the currency in circulation being exactly offset by a decrease in bank reserves.

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