2 - Under what circumstances might you expect barter to...

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Unit 02 - Money and the Payments System 2-1 Unit 2 Money and the Payments System Conceptual Problem 1 Describe at least 3 ways you could pay for your morning cup of coffee. What are the advantages and disadvantages of each? Conceptual Problem 2 Explain how money encourages specialization, and how specialization improves everyone’s standard of living. Conceptual Problem 3 As of March 2007, 13 of the 27 countries of the European Union have adopted the euro . The remaining 14 countries, including Great Britain, Denmark, and Sweden have retained their own currencies. What are the advantages of a common currency for someone who is traveling through Europe? Conceptual Problem 4 Despite the efforts of the United States Treasury and the Secret Service, someone discovers a cheap way to counterfeit $100 bills. What will be the impact of this discovery on the economy? Analytical Problems 1
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Unformatted text preview: Under what circumstances might you expect barter to reemerge in an economy that has fiat money as a means of payment? Analytical Problems 2 What factors should you take into account when considering using the following assets as stores of value? i) real estate ii) stocks iii) government bonds Analytical Problems 3 *Under what circumstances might money in the form of currency be the best option as a store of value? Unit 02 - Money and the Payments System 2-2 Analytical Problems 4 Assuming no interest is paid on checking accounts, what would you expect to see happen to the relative growth rates of M1 and M2 if interest rates rose significantly? Analytical Problems 5 If money growth is related to inflation, what would you expect to happen to the inflation rates of countries that join a monetary union and adopt a common currency such as the euro?...
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This note was uploaded on 02/12/2012 for the course ECON 101 taught by Professor Abrams during the Spring '11 term at Adams State University.

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2 - Under what circumstances might you expect barter to...

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