Everyone in Bananatown lovesbananas! In fact, sometimes theyare willing to take them as a form ofpayment for goods and servicesinstead of dollars.Bill, a tourist, sees an opportunityto make some money due to 8bananas being worth $2. He buysall of the bananas in Bananatownand goes home. He stores them inthe trunk of his car for 6 months.Bill then goes back to Bananatown,knowing that the people there willbe excited to purchase bananasfrom him. He opens his trunk andrealizes that this plan was not wellthought out, as all the bananas arerotten.How are bananas used as a formof money in Bananatown? How are bananas used as a formof money in Bananatown?A. Bananas function as a unitof account and medium ofexchange, but not as astore of value.B. Bananas function as amedium of exchange andstore of value, but not as aunit of account.C. It is impossible to usebananas as currency inBananatown.D. Bananas function as a unitof account and store ofvalue, but not as a mediumof exchange.

Money refers to the medium of exchange. Money is accepted as payments for goods and services in an…

How are bananas used as a form of money in Bananatown? A. Bananas function as a unit of account and medium of exchange, but not as a store of value. B. Bananas function as a medium of exchange and store of value, but not as a unit of account. C. It is impossible to use bananas as currency in Bananatown. D. Bananas function as a unit of account and store of value, but not as a medium of exchange.

How are bananas used as a form of money in Bananatown? A. Bananas function as a unit of account and medium of exchange, but not as a store of value. B. Bananas function as a medium of exchange and store of value, but not as a unit of account. C. It is impossible to use bananas as currency in Bananatown. D. Bananas function as a unit of account and store of value, but not as a medium of exchange.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: What of the following are functions of money? Olegal tender for transactions Ofacilitate sales,…

A: Money can be defined as a universally accepted medium of exchange that is used to facilitate…

Q: What are the advantages of an economy using money as opposed to a barter system of exchange?

A: Money can be defined as any good that is widely accepted for purpose of exchange and repayment of…

Q: Why (not how) did money evolve out of a barter economy?

A: A market system with exchange of goods and services with goods and services is known as barter…

Q: Gold and silver have been historically used as materials for making commodity money (coins) by many…

A: The functions of money can be sub-divided into primary functions and secondary functions. The…

Q: In the POW camps during World War II, cigarettes fulfilled the functions of money because they acted…

A: Money is a widely accepted transaction prices hold value over a time period. The value of money is…

Q: Could each of the following items potentially serve as money? Consider each as a medium of exchange,…

A: Money is used as the currency for buying goods and services. Money replaced the barter system.

Q: 25. Jinyue is saving money in order to purchase a new iPad next semester. This represents using…

A: People save money to become financially independent and to secure their future emergency needs.…

Q: Consider the following data. Value (S bilions) 657 3.094 1.546 Item Currency Savings and money…

A: Money refers to anything that can be used as a medium of exchange. It should be widely accepted.…

Q: The use of money is more efficient than barter because the introduction of moneyTop of Form reduces…

A: Money is a resource or asset that is accepted and used as an exchange medium to buy commodities and…

Q: Which of the following is an example of fiat money? Oa U.S. one-hundred dollar bill O a government…

A: Answer: Correct option: A (a U.S. one-hundred dollar bill) Explanation: Fiat money refers to the…

Q: 7. a) only the central bank can create money b) commercial banks can create credit c) all UK…

A: Since you have posted multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following is considered least liquid? O a) currency bills O b) Checking account O c)…

A: In economics, liquidity is defined as the ability of an asset to be turned into cash. An asset is…

Q: Which of the below statements DOES NOT CORRECTLY capture the meaning of the word "money" as…

A: Money is anything that serves as a medium of exchange, a unit of account, and a store of value

Q: The type of currency in circulation in the r O metallic money O commodity money silver certificates…

A: Definition: The US economy is a mixed economy. It works as per a monetary framework that describes…

Q: Which of the following is a function of money? a. a unit of account b. medium of exchange c. a store…

A: ANS: d.All of the above are correct Money has various functions they can be broadly classified…

Q: Which function of money is best served by bitcoin? A. A medium of exchange B. A unit…

A: The bid=t coin is accepted to exchange for certain goods and services. This indicates the medium of…

Question

100%

Everyone in Bananatown loves
bananas! In fact, sometimes they
are willing to take them as a form of
payment for goods and services
instead of dollars.
Bill, a tourist, sees an opportunity
to make some money due to 8
bananas being worth $2. He buys
all of the bananas in Bananatown
and goes home. He stores them in
the trunk of his car for 6 months.
Bill then goes back to Bananatown,
knowing that the people there will
be excited to purchase bananas
from him. He opens his trunk and
realizes that this plan was not well
thought out, as all the bananas are
rotten.
How are bananas used as a form
of money in Bananatown?

How are bananas used as a form
of money in Bananatown?
A. Bananas function as a unit
of account and medium of
exchange, but not as a
store of value.
B. Bananas function as a
medium of exchange and
store of value, but not as a
unit of account.
C. It is impossible to use
bananas as currency in
Bananatown.
D. Bananas function as a unit
of account and store of
value, but not as a medium
of exchange.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Currency is different from money in that currency______ A)is a note representing the worth of actual money B) is universally the same everywhere cannot be C)duplicated or counterfeit D) is not a means of payment
Give typing answer with explanation and conclusion
You're using prices to determine which apple is best (obviously Honeycrisp). What is the use of money in this context? -store of value -unit of account -discount sharing -medium of exchange
Image
Using the information below compute the M2 money supply. The M2 money supply is $ Using the information below compute the M2 money supply. Category Currency and coin held by the public Checking account balances Traveler's checks Savings account balances Small denomination time deposits Money market deposit accounts in banks Noninstitutional money market fund shares The M2 money supply is $ Amount $200 $1,900 $10 $3,400 $5,000 $1,000 $2,000
Money/Banking/The Quantity of Money Theory (Chapter 14) 1.1 What are the four functions of money? Explain each in your own words. Can something be considered money if it does not fulfill all four functions? 1.2 Using the five criteria in the textbook, explain how U.S. currency is suitable to use as a medium of exchange. 1.3 Suppose that you decide that you no longer want to hold currency, and deposit all of your currency holdings to your checking account. What is the immediate or initial impact of this transaction on M1 and M2?
Celine, another manager at a different branch of MillerBank in a different region of the country, faces a reserve requirement of 10%. She has excess reserves 0f $1000. What’s the maximum amount that she could increase the money supply? a.500 dollars b.1000 dollars c.10000 dollars d.100 dollars e.2000 dollars
part-c: Suppose I live in a hypothetical country, Pandesia, where there is 100% reserve banking. I deposit $1,000 in a checking account at the 1st National Bank of Pandesia. Using the T-account (ie: assets on the left and liabilities on the right), explain whether / how my deposit changes the money supply in Pandesia. DON'T ANSWER PART C Just use part c to answer D part-d: Now suppose the Central Bank of Pandesia (CBP) decides that after centuries of 100% reserve banking, it is time for a change and decide to switch the Pandesian banking system to fractional reserve banking. To begin with, board of governors at the CBP agree on a required reserve ratio of 10%. How does my deposit of $1,000 at the 1st National Bank of Pandesia impact the money supply in Pandesia after this change? Explain by using the T-account. part-e: Next suppose that Pandesian economy enters a recession. To fight against the unemployment created by the recession, CBP decides to expand the Pandesian money supply.…
Consider the three functions of money discussed in class: medium of exchange, unit of account, and store of value. Choose one function and describe what it means. What would economic transactions be like without this function? Would life be better or worse?
If raw whole eggs of uniform size were used as money, which of the following functions of money would be the hardest for this to satisfy? Select one: a. store of value b. unit of account c. medium of exchange d. certificate of gold
Problems and aplicarion q7
suppose the required reserve ratio is 11%. How much additional money can BBB lend out at a maximum? suppose the required reserve ratio is lowered to 8%. What is the Maximum amount of additional money that BBB can lend out? Is this different than the maximum amount of new money BBB can create by itself? 3. suppose the required reserve ratio is raised to 15%. What is the maximum amount of additional money BBB can lend out?