ECN211 L3 Demand_BB

ECN211 L3 Demand_BB - ECN 211 Macroeconomic Principles L3:...

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 9/19/11  4 :Markets 11 ECN 211 Macroeconomic Principles L3: Demand
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 9/19/11  4 :Markets 22 Markets Market … a place or service that enables buyers and sellers to exchange goods and services Two Types of Market Specific location – agricultural markets Many locations - Stock market
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 9/19/11  4 :Markets 33 Barter Barter … direct exchange of goods and services without the use of money Creates a difficult problem to enable exchange – the double coincidence of wants (exactly what each of the traders want, pickachu for charizard while the other guy wanted charizard for pickachu) Can then lead to high transaction costs
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 9/19/11  4 :Markets 44 Transaction costs Transaction costs … cost involved in making an exchange Costs of search and negotiation
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 9/19/11  4 :Markets 55 Double coincidence of Wants Person Wants Has Harry Potter The Ring An invisibility  cloak Frodo An annoying  Donkey The Ring Gandolf An Invisibility  Cloack Princess Shrek Princess An annoying  donkey
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 9/19/11  4 :Markets 66 The Usefulness of Money The existence of money makes the whole process easier Money is: A medium of exchange A measure of value A store of wealth Inflation is what makes money seem useless
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This note was uploaded on 09/19/2011 for the course ECN 211 taught by Professor Kingston during the Fall '08 term at ASU.

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ECN211 L3 Demand_BB - ECN 211 Macroeconomic Principles L3:...

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