John is employed as a barista in a local coffee house. He receives a salary of 10,000 AED monthly. For each of the following situations described identify which functions of money is emphasized and explain clearly the importance of the function to the economy. (a). John used 3000 AED to pay his rent (b). John put aside (in a savings account) 4000 AED. He is hoping to save the required deposit on a one-bedroom apartment he hopes to buy (c). John is in a store keenly comparing the prices on different brands of TVs he hopes to purchase.

John is employed as a barista in a local coffee house. He receives a salary of 10,000 AED monthly. For each of the following situations described identify which functions of money is emphasized and explain clearly the importance of the function to the economy. (a). John used 3000 AED to pay his rent (b). John put aside (in a savings account) 4000 AED. He is hoping to save the required deposit on a one-bedroom apartment he hopes to buy (c). John is in a store keenly comparing the prices on different brands of TVs he hopes to purchase.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter6: Saving And Investing

Section: Chapter Questions

Problem 19AA

See similar textbooks

Similar questions

Suppose the annual nominal interest rate is 7 percent and the inflation rate is 7 percent. If you deposit $1,000 in an interest-bearing checking account, at the end of the year: Multiple Choice your purchasing power will have decreased. your purchasing power will have increased. your savings will have a nominal decrease your purchasing power will have stayed the same.
What would be the value of consumption of Saving is $1300 and the income is $2250
Suppose that the typical consumer has a salary of $30,000 in 2017. His salary grows by 2% per year. What can we say about his ability to pay for his consumption basket over time?
The effective interest rate on a mortgage with monthly payments is 9.38%. What is the monthly interest rate on the mortgage? What is the nominal interest rate?
Which of the following is a major factor in determining an individual's supply of savings? A: Patience B: Investment C: GDP
Suppose you take out a loan for school this year for $4500. The bank expects that the rate of inflation for next year will equal 2%. You and the bank agree that in one year's time, you will pay back the full amount at an interest rate of 6%. Next year though, there is a sudden rise in inflation, causing inflation to equals 7%. How much will you pay back in one year?
a, b and c
C is 200 and Y is 1003 Find APS and APY
Dhorkas owns a small restaurant. She has labourer who she pays GHC 12,000 per year, pays annual rent of GHC 5,000 for her shop, and spends GHC 20,000 per year on the materials she uses for the preparation of her meals. She has GHC 40,000 of her own money which she used to purchase gas cylinder and stove, refrigerator, microwave, and blender and so forth. If she had invested the money in a treasury bill she would earn GHC 4,000 per year. She has been offered GHC 15,000 per year to work as a cook in AIT. She said her entrepreneurial abilities are worth GHC 3,000 per year. Total annual revenue from pottery sales is $72,000. Calculate Dhorkas’ explicit and implicit costs and the find her accounting and economic profits. Explain why the implicit cost will constitute Dhorkas’ normal profit
What would be the value of consumption if savings is $1300 and the value of Income is $2200
Only typed answer (a) A bank is offering 5-year certificates of deposit (CDs) with a 5% interest rate. The expected inflation rate is 3%. Calculate the expected real interest rate on the CD. (Show your work.
A consumer's current income (y) is 200 and the future income ( t.') is 240. A current lump sum tax (t) of 10 is paid and the tax in the next period (t') is 15. The real interest rate is 20% for each period. Please assume that current and future consumption are complements. and the consumer always prefers to have one unit of current consumption and two units of consumption in the future.Calculate the consumer's lifetime wealth.Calculate the optimal current and future consumption and the optimal current and future savings. Is the consumer a lender or a borrower? How does he she. as a lender or a borrower. affect the future consumption?