Explain money

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 10, Problem 1RQ

To determine

Explain money

Expert Solution & Answer

Explanation of Solution

Money is the most liquid asset in the economy in which people regularly use to buy goods and services from other people. Even if the return from money is less than other financial assets, people still demand and hold money due to its higher liquidity. This means goods and service can easily transfer the used money. Otherwise, people have the choice to use barter or else, people have to suffer the cost of selling other assets to obtain money. Hence, anything that is generally accepted in payment for goods and services or in the repayment of debts is called money.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Many countries have policies that limit how much interest a moneylender can charge on a loan. Do you think these limits are a good idea? Who benefits from the laws and who loses? What are likely to be the long-term effects of such laws? Tips: For part 2, you may think about how a low interest rate would affect the poor and those who owe huge debts. For part 3, you may think about how it would affect the profitability of the banking sector and the supply of lending (will lenders be encouraged to lend more?), and what implications it may have for "credit rationing" (being credit constrained).

International Gold Standard (19th century): If different countries fix the price of their currencies e in terms of gold this immediately implies that e are fixed. If the Central Bank of two countries stand ready to buy and sell gold at a fixed price in terms of their respective domestic currencies, then there is only one value of e that eliminates the possibility of arbitrage. Suppose that S100 buys 1 ounce of gold and 100 pounds buys lounce of gold. Under fixed exchange rates, this implies that IS buys Ipound. Explains what would happen (arbitrageurs' action and result) if instead e-1S buys 2 pounds

Andover Bank and Lowell Bank each sell one-year certificates of deposit (CDs). The interest rates on these CDs are given in the table below for a three-year period. Bank Andover Bank Lowell Bank 2018 2% 5% 2019 2% 5% 2020 11% 5% Suppose you deposit $1,000 in a CD in each bank at the beginning of 2018. At the end of 2018, you take your $1,000 and any interest earned and invest it in a CD for the following year. You do this again at the end of 2019. At the end of 2020, the interest over this three-year period at Andover Bank is $ (Enter your response rounded to the nearest penny.)

Answer 2

Question

Chapter 10, Problem 1RQ

To determine

Explain money

Expert Solution & Answer

Explanation of Solution

Money is the most liquid asset in the economy in which people regularly use to buy goods and services from other people. Even if the return from money is less than other financial assets, people still demand and hold money due to its higher liquidity. This means goods and service can easily transfer the used money. Otherwise, people have the choice to use barter or else, people have to suffer the cost of selling other assets to obtain money. Hence, anything that is generally accepted in payment for goods and services or in the repayment of debts is called money.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 10, Problem 1RQ

To determine

Explain money

Expert Solution & Answer

Explanation of Solution

Money is the most liquid asset in the economy in which people regularly use to buy goods and services from other people. Even if the return from money is less than other financial assets, people still demand and hold money due to its higher liquidity. This means goods and service can easily transfer the used money. Otherwise, people have the choice to use barter or else, people have to suffer the cost of selling other assets to obtain money. Hence, anything that is generally accepted in payment for goods and services or in the repayment of debts is called money.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 10, Problem 1RQ

To determine

Explain money

Expert Solution & Answer

Explanation of Solution

Money is the most liquid asset in the economy in which people regularly use to buy goods and services from other people. Even if the return from money is less than other financial assets, people still demand and hold money due to its higher liquidity. This means goods and service can easily transfer the used money. Otherwise, people have the choice to use barter or else, people have to suffer the cost of selling other assets to obtain money. Hence, anything that is generally accepted in payment for goods and services or in the repayment of debts is called money.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 10, Problem 1RQ

To determine

Explain money

Expert Solution & Answer

Explanation of Solution

Money is the most liquid asset in the economy in which people regularly use to buy goods and services from other people. Even if the return from money is less than other financial assets, people still demand and hold money due to its higher liquidity. This means goods and service can easily transfer the used money. Otherwise, people have the choice to use barter or else, people have to suffer the cost of selling other assets to obtain money. Hence, anything that is generally accepted in payment for goods and services or in the repayment of debts is called money.

Answer 6

Chapter 10, Problem 1RQ

To determine

Explain money

Expert Solution & Answer

Explanation of Solution

Money is the most liquid asset in the economy in which people regularly use to buy goods and services from other people. Even if the return from money is less than other financial assets, people still demand and hold money due to its higher liquidity. This means goods and service can easily transfer the used money. Otherwise, people have the choice to use barter or else, people have to suffer the cost of selling other assets to obtain money. Hence, anything that is generally accepted in payment for goods and services or in the repayment of debts is called money.

Answer 7

Chapter 10, Problem 1RQ

To determine

Explain money

Answer 8

Expert Solution & Answer

Explanation of Solution

Money is the most liquid asset in the economy in which people regularly use to buy goods and services from other people. Even if the return from money is less than other financial assets, people still demand and hold money due to its higher liquidity. This means goods and service can easily transfer the used money. Otherwise, people have the choice to use barter or else, people have to suffer the cost of selling other assets to obtain money. Hence, anything that is generally accepted in payment for goods and services or in the repayment of debts is called money.