Log in
Economics
2
answers
0
watching
65
views

1. How does gold exemplify characteristics of a good currency? Why is gold money, and how could gold be used as money today?

2. Explain how exchange rate equilibrium is set in the currency markets. Use any of the theories that we learned.

Watch
2
answers
0
watching
65
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share
Joshua Stredder
Joshua StredderLv10
28 Sep 2019
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Suppose the consumption of gold offers people a marginal utility that diminishes as that person consumes more gold. Assume also that gold can be mined in unlimited amounts at the constant marginal costs, X (or chi), units of the nongold consuption good.

a) can the trading value of gold exceed X in equilibrium? Explain. What is the effect on gold consumption and mining of an increased use of gold as money?

b) Suppose instead that the marginal mining cost increases with the amount mined. What is now the effect on gold consumption and mining of an increased use of gold as money?

Question 2 (3 points) If an individual bank receives $100,000 in new deposits and the required reserve ratio is 10 percent, the bank must keep the following amount of required reserves with the Fed?

$90,000.

$1,000,000. '

Zero.

$10,000.

 

Question 3 (3 points) Assume that the Fed purchases $10 million in bonds from a bank, the monetary base will: 

Increase by $10 million.

Remain unchanged.

Decrease by $10 million.

Increase by $5 million.

 

Question 4 (3 points) When we say that money has a function as a medium of exchange, this implies that:

Money must be in the form of a precious metal such as gold.

Money must be set at a fixed exchange rate in international currency markets.

Money is backed by the gold standard.

Money is used to purchase goods and services rather than resorting to barter.

 

Question 5 (3 points) Which of the following is not considered an asset for a bank: 

Customer deposits.

U.S. government treasury bills.

Corporate loans.

U.S. government-issued debt.

1) Under the gold standard exchange rate system

A) the value of all currencies was determined by market forces.
B) the value of all currencies was fixed in terms of gold.
C) all nations must stand ready and willing to provide gold in exchange for their home country currency.
(A) and (C

(B) and (C)

2) When have we NOT observed fixed exchange? rates:

a. In developing countries today.
b. Between? 1945-73.
c. In the decades prior to WWI.
d. Between the US and Japan in the 1980s.

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in