Macroeconomics (Book Only)
12th Edition
ISBN: 9781285738314
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 12, Problem 2QP
To determine
Identify how the fall in value of the dollar affects the functions of money.
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After suffering two years of staggering hyperinflation, the African nation of Zimbabwe officially abandoned its currency, the Zimbabwean dollar, in April 2009 and made the U.S. dollar its official currency. Why would anyone in Zimbabwe be willing to accept U.S. dollars in exchange for goods and services?
Complete each of the following sentences: a product that serves both as money and as a commodity is
#27. Identify two examples of commodity money.
#28. The U.S. dollar is an example of fiat money. What is fiat money?
#29. Why can fiat money be successfully used as a currency despite the fact that it has not intrinsic value backing it up?
Chapter 12 Solutions
Macroeconomics (Book Only)
Ch. 12.2 - Prob. 1STCh. 12.2 - Prob. 2STCh. 12.2 - Prob. 3STCh. 12.3 - Prob. 1STCh. 12.3 - Prob. 2STCh. 12.3 - Prob. 3STCh. 12.4 - Prob. 1STCh. 12.4 - Prob. 2STCh. 12.4 - Prob. 3STCh. 12 - Prob. 1VQP
Ch. 12 - Prob. 2VQPCh. 12 - Prob. 3VQPCh. 12 - Prob. 4VQPCh. 12 - Prob. 5VQPCh. 12 - How much money did you make last year? What is...Ch. 12 - Prob. 2QPCh. 12 - Prob. 3QPCh. 12 - Prob. 4QPCh. 12 - Prob. 5QPCh. 12 - Prob. 6QPCh. 12 - Prob. 7QPCh. 12 - Prob. 8QPCh. 12 - Prob. 9QPCh. 12 - Prob. 10QPCh. 12 - Prob. 11QPCh. 12 - Prob. 12QPCh. 12 - Prob. 13QPCh. 12 - Prob. 14QPCh. 12 - Prob. 15QPCh. 12 - Prob. 16QPCh. 12 - Prob. 17QPCh. 12 - Prob. 1WNGCh. 12 - Prob. 2WNGCh. 12 - Prob. 3WNGCh. 12 - Prob. 4WNGCh. 12 - Prob. 5WNGCh. 12 - Prob. 6WNGCh. 12 - Prob. 7WNGCh. 12 - Prob. 8WNGCh. 12 - Prob. 9WNGCh. 12 - Prob. 10WNG
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- What is the fundamental difference between commodity money and fiat currency? commodity money has no intrinsic value, fiat is gold based commodity and fiat money are synonymous terms so long as they consistute the medium of exchange commodity money has intrinsic value, fiat does not commodity money requires governance institutions, fiat does notarrow_forward“Whenever currency is deposited in a commercial bank, cash goes out of circulation and, as a result, the supply of money is reduced.” Do you agree? Explain why or why not.arrow_forwardIndicate which of the functions of money (a medium of exchange, a unit of account, and a store of value) each of the following performs in the U.S. economy. Check all that apply. Medium of Exchange Unit of Account Store of Value U.S. dollar bill British pound Picasso painting Plastic credit card Given your answers to the previous task, indicate whether each of the following is considered money in the U.S. economy. Money Yes No U.S. dollar bill British pound Picasso painting Plastic credit cardarrow_forward
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