Macroeconomics
10th Edition
ISBN: 9781319105990
Author: Mankiw, N. Gregory.
Publisher: Worth Publishers,
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Chapter 5, Problem 6PA
To determine
The hyperinflation.
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Is barter becoming more or less prevalent in the US economy? Why?
State three ways in which a government can influence the value of its currency. For each, state whether the activity affects the supply-side or demand-side of the market, and name a disadvantage of the strategy.
With a barter system, 1 dog is worth 20 carrots, 40 carrots are worth 8 beans and 1 cat is worth 100 carrots. What is 1 dog worth?
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- The newly-formed kingdom of Monkeytown is attempting to create their first currency. Many suggestions have been made, but the current favorite is to use bananas. Would bananas be a valid form of money? Why or why not? Would the residents of Monkeytown be able to use their bananas to make purchases in America? Why or why not? In your answer, please define any important economic terms used.arrow_forwardTo ensure that paper money will be accepted, the U.S. government implicitly promises the public that Group of answer choices it will not change currency denominations so that the paper currencies U.S. citizens have will continue to be used for exchanges. the U.S. monetary system will always be backed by a precious metal. it will not print money so fast that it loses its value. it will not change the rate at which the dollar is exchanged for other currencies.arrow_forwardCountries normally attempt to manage their economy using monetary policy. By managing the money supply, and manipulating the rate that the central bank loans money to banks (in the U.S., known as the Discount Rate), they attempt to either stimulate or deflate the level of economic activity (to control inflation). Discuss how international flows of money may hinder these efforts.arrow_forward
- How did Manchukuo become the centrepiece of the Japanese empire in the 1930s?arrow_forwardIf ours were a barter economy, how would you pay your tuition bill? What if your college did not want the goods or services you offered in payment?arrow_forwardPersonal possession of currency is prohibited in U.S. prisons, although, in practice, prisoners still exchange goods and services. U.S. prisoners used cigarettes as a medium of exchange until smoking was banned in U.S. prisons in 2003. After 2003, prisoners looked to other items on the commissary menu to facilitate exchange. In 2008, the Wall Street Journal reported that energy bars had caught on as money in some U.S. prisons. One important difference between using energy bars and using dollars as money is that____ have intrinsic value. Energy bars are an example of ___ money.arrow_forward
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