Shakespeare's admonition and the goldsmith evolution as fractional reserve banking.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 15, Problem 1SQP

To determine

Shakespeare's admonition and the goldsmith evolution as fractional reserve banking.

Expert Solution & Answer

Explanation of Solution

The barter system was the market exchange system that existed in the ancient period. According to the barter system, a commodity was exchanged with another commodity in the market. Thus, there should be double co-incidence of needs in order for exchange to take place in the market. This problem was corrected with the establishment of the money. Money is anything that serves as a medium of exchange in the market; it is unit of account as well as the store of value in the economy. There are many forms of money such as the paper currencies, metallic coins, bills and so on.

Gold was considered as money in the European nations in the middle ages. The preciousness of the metal and the heaviness made storage of the metal very difficult. This means that they needed a place to store the gold. The solution was to deposit the gold with those who work with it such as the goldsmiths. The paper receipt for the deposited gold started to be valued as money. Thus, the goldsmiths were the first bankers. In the initial ages, the goldsmiths followed the Shakespeare’s idea and they provided only the receipts for the gold that they had in their vaults.

Later, they were able to identify that whenever people were drawing their gold deposits from the goldsmiths, the new gold deposits were there to offset the drawings. Thus, they were able to lend out loan to the people from their gold deposits and identified that there is no requirement to keep 100 percent deposits with them. This started the evolution of the fractional reserve system where the banks were able to make the loans to the public only keeping a small fraction of the deposits as reserves with them. Thus, at the final stages, the goldsmiths did not follow the idea of Shakespeare, which never created new money and stimulated the economy due to the absence of the loans and the presence of 100 percent reserves.

Economics Concept Introduction

Money: Money is anything that has basically three functions such as, the medium of exchange, unit of account, and store of value in the economy.

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

Suppose the marginal social cost of television sets is $100. This is constant and equal to the average cost of television sets. The annual demand for television sets is given by the following equation: Q = 200,000-500P, where Qis the quantity sold per year and P is the price of television sets. a) If television sets are sold in a perfectly competitive market, calculate the annual number sold. Under what circumstances will the market equilibrium be efficient? b) Show the losses in well-being each year that would result from a law limiting sales of television sets to 100,000 per year. Show the effect on the price, marginal social benefit, and marginal social cost of television sets. Show the net loss in well-being that will result from a complete ban on the sales of television sets. (show with graphs.)

refer to exhibit 8.12 and identify each curve in the graph

Q1. (Chap 1: Game Theory.) In the simultaneous games below player 1 is choosing between Top and Bottom, while player 2 is choosing between Left and Right. In each cell the first number is the payoff to player 1 and the second is the payoff to player 2. Part A: Player 1 Top Bottom Player 2 Left 25, 22 Right 27,23 26,21 28, 22 (A1) Does player 1 have a dominant strategy? (Yes/No) If your answer is yes, which one is it? (Top/Bottom) (A2) Does player 2 have a dominant strategy? (Yes/No.) If your answer is yes, which one is it? (Left/Right.) (A3) Can you solve this game by using the dominant strategy method? (Yes/No) If your answer is yes, what is the solution?

Answer 2

Question

Chapter 15, Problem 1SQP

To determine

Shakespeare's admonition and the goldsmith evolution as fractional reserve banking.

Expert Solution & Answer

Explanation of Solution

The barter system was the market exchange system that existed in the ancient period. According to the barter system, a commodity was exchanged with another commodity in the market. Thus, there should be double co-incidence of needs in order for exchange to take place in the market. This problem was corrected with the establishment of the money. Money is anything that serves as a medium of exchange in the market; it is unit of account as well as the store of value in the economy. There are many forms of money such as the paper currencies, metallic coins, bills and so on.

Gold was considered as money in the European nations in the middle ages. The preciousness of the metal and the heaviness made storage of the metal very difficult. This means that they needed a place to store the gold. The solution was to deposit the gold with those who work with it such as the goldsmiths. The paper receipt for the deposited gold started to be valued as money. Thus, the goldsmiths were the first bankers. In the initial ages, the goldsmiths followed the Shakespeare’s idea and they provided only the receipts for the gold that they had in their vaults.

Later, they were able to identify that whenever people were drawing their gold deposits from the goldsmiths, the new gold deposits were there to offset the drawings. Thus, they were able to lend out loan to the people from their gold deposits and identified that there is no requirement to keep 100 percent deposits with them. This started the evolution of the fractional reserve system where the banks were able to make the loans to the public only keeping a small fraction of the deposits as reserves with them. Thus, at the final stages, the goldsmiths did not follow the idea of Shakespeare, which never created new money and stimulated the economy due to the absence of the loans and the presence of 100 percent reserves.

Economics Concept Introduction

Money: Money is anything that has basically three functions such as, the medium of exchange, unit of account, and store of value in the economy.

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 15, Problem 1SQP

To determine

Shakespeare's admonition and the goldsmith evolution as fractional reserve banking.

Expert Solution & Answer

Explanation of Solution

The barter system was the market exchange system that existed in the ancient period. According to the barter system, a commodity was exchanged with another commodity in the market. Thus, there should be double co-incidence of needs in order for exchange to take place in the market. This problem was corrected with the establishment of the money. Money is anything that serves as a medium of exchange in the market; it is unit of account as well as the store of value in the economy. There are many forms of money such as the paper currencies, metallic coins, bills and so on.

Gold was considered as money in the European nations in the middle ages. The preciousness of the metal and the heaviness made storage of the metal very difficult. This means that they needed a place to store the gold. The solution was to deposit the gold with those who work with it such as the goldsmiths. The paper receipt for the deposited gold started to be valued as money. Thus, the goldsmiths were the first bankers. In the initial ages, the goldsmiths followed the Shakespeare’s idea and they provided only the receipts for the gold that they had in their vaults.

Later, they were able to identify that whenever people were drawing their gold deposits from the goldsmiths, the new gold deposits were there to offset the drawings. Thus, they were able to lend out loan to the people from their gold deposits and identified that there is no requirement to keep 100 percent deposits with them. This started the evolution of the fractional reserve system where the banks were able to make the loans to the public only keeping a small fraction of the deposits as reserves with them. Thus, at the final stages, the goldsmiths did not follow the idea of Shakespeare, which never created new money and stimulated the economy due to the absence of the loans and the presence of 100 percent reserves.

Economics Concept Introduction

Money: Money is anything that has basically three functions such as, the medium of exchange, unit of account, and store of value in the economy.

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 15, Problem 1SQP

To determine

Shakespeare's admonition and the goldsmith evolution as fractional reserve banking.

Expert Solution & Answer

Explanation of Solution

The barter system was the market exchange system that existed in the ancient period. According to the barter system, a commodity was exchanged with another commodity in the market. Thus, there should be double co-incidence of needs in order for exchange to take place in the market. This problem was corrected with the establishment of the money. Money is anything that serves as a medium of exchange in the market; it is unit of account as well as the store of value in the economy. There are many forms of money such as the paper currencies, metallic coins, bills and so on.

Gold was considered as money in the European nations in the middle ages. The preciousness of the metal and the heaviness made storage of the metal very difficult. This means that they needed a place to store the gold. The solution was to deposit the gold with those who work with it such as the goldsmiths. The paper receipt for the deposited gold started to be valued as money. Thus, the goldsmiths were the first bankers. In the initial ages, the goldsmiths followed the Shakespeare’s idea and they provided only the receipts for the gold that they had in their vaults.

Later, they were able to identify that whenever people were drawing their gold deposits from the goldsmiths, the new gold deposits were there to offset the drawings. Thus, they were able to lend out loan to the people from their gold deposits and identified that there is no requirement to keep 100 percent deposits with them. This started the evolution of the fractional reserve system where the banks were able to make the loans to the public only keeping a small fraction of the deposits as reserves with them. Thus, at the final stages, the goldsmiths did not follow the idea of Shakespeare, which never created new money and stimulated the economy due to the absence of the loans and the presence of 100 percent reserves.

Economics Concept Introduction

Money: Money is anything that has basically three functions such as, the medium of exchange, unit of account, and store of value in the economy.

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 15, Problem 1SQP

To determine

Shakespeare's admonition and the goldsmith evolution as fractional reserve banking.

Expert Solution & Answer

Explanation of Solution

The barter system was the market exchange system that existed in the ancient period. According to the barter system, a commodity was exchanged with another commodity in the market. Thus, there should be double co-incidence of needs in order for exchange to take place in the market. This problem was corrected with the establishment of the money. Money is anything that serves as a medium of exchange in the market; it is unit of account as well as the store of value in the economy. There are many forms of money such as the paper currencies, metallic coins, bills and so on.

Gold was considered as money in the European nations in the middle ages. The preciousness of the metal and the heaviness made storage of the metal very difficult. This means that they needed a place to store the gold. The solution was to deposit the gold with those who work with it such as the goldsmiths. The paper receipt for the deposited gold started to be valued as money. Thus, the goldsmiths were the first bankers. In the initial ages, the goldsmiths followed the Shakespeare’s idea and they provided only the receipts for the gold that they had in their vaults.

Later, they were able to identify that whenever people were drawing their gold deposits from the goldsmiths, the new gold deposits were there to offset the drawings. Thus, they were able to lend out loan to the people from their gold deposits and identified that there is no requirement to keep 100 percent deposits with them. This started the evolution of the fractional reserve system where the banks were able to make the loans to the public only keeping a small fraction of the deposits as reserves with them. Thus, at the final stages, the goldsmiths did not follow the idea of Shakespeare, which never created new money and stimulated the economy due to the absence of the loans and the presence of 100 percent reserves.

Economics Concept Introduction

Money: Money is anything that has basically three functions such as, the medium of exchange, unit of account, and store of value in the economy.

Answer 6

Chapter 15, Problem 1SQP

To determine

Shakespeare's admonition and the goldsmith evolution as fractional reserve banking.

Expert Solution & Answer

Explanation of Solution

The barter system was the market exchange system that existed in the ancient period. According to the barter system, a commodity was exchanged with another commodity in the market. Thus, there should be double co-incidence of needs in order for exchange to take place in the market. This problem was corrected with the establishment of the money. Money is anything that serves as a medium of exchange in the market; it is unit of account as well as the store of value in the economy. There are many forms of money such as the paper currencies, metallic coins, bills and so on.

Gold was considered as money in the European nations in the middle ages. The preciousness of the metal and the heaviness made storage of the metal very difficult. This means that they needed a place to store the gold. The solution was to deposit the gold with those who work with it such as the goldsmiths. The paper receipt for the deposited gold started to be valued as money. Thus, the goldsmiths were the first bankers. In the initial ages, the goldsmiths followed the Shakespeare’s idea and they provided only the receipts for the gold that they had in their vaults.

Later, they were able to identify that whenever people were drawing their gold deposits from the goldsmiths, the new gold deposits were there to offset the drawings. Thus, they were able to lend out loan to the people from their gold deposits and identified that there is no requirement to keep 100 percent deposits with them. This started the evolution of the fractional reserve system where the banks were able to make the loans to the public only keeping a small fraction of the deposits as reserves with them. Thus, at the final stages, the goldsmiths did not follow the idea of Shakespeare, which never created new money and stimulated the economy due to the absence of the loans and the presence of 100 percent reserves.

Economics Concept Introduction

Money: Money is anything that has basically three functions such as, the medium of exchange, unit of account, and store of value in the economy.

Answer 7

Chapter 15, Problem 1SQP

To determine

Shakespeare's admonition and the goldsmith evolution as fractional reserve banking.

Answer 8

Expert Solution & Answer

Explanation of Solution

The barter system was the market exchange system that existed in the ancient period. According to the barter system, a commodity was exchanged with another commodity in the market. Thus, there should be double co-incidence of needs in order for exchange to take place in the market. This problem was corrected with the establishment of the money. Money is anything that serves as a medium of exchange in the market; it is unit of account as well as the store of value in the economy. There are many forms of money such as the paper currencies, metallic coins, bills and so on.

Gold was considered as money in the European nations in the middle ages. The preciousness of the metal and the heaviness made storage of the metal very difficult. This means that they needed a place to store the gold. The solution was to deposit the gold with those who work with it such as the goldsmiths. The paper receipt for the deposited gold started to be valued as money. Thus, the goldsmiths were the first bankers. In the initial ages, the goldsmiths followed the Shakespeare’s idea and they provided only the receipts for the gold that they had in their vaults.

Later, they were able to identify that whenever people were drawing their gold deposits from the goldsmiths, the new gold deposits were there to offset the drawings. Thus, they were able to lend out loan to the people from their gold deposits and identified that there is no requirement to keep 100 percent deposits with them. This started the evolution of the fractional reserve system where the banks were able to make the loans to the public only keeping a small fraction of the deposits as reserves with them. Thus, at the final stages, the goldsmiths did not follow the idea of Shakespeare, which never created new money and stimulated the economy due to the absence of the loans and the presence of 100 percent reserves.