How does the concept of commodity money differ from fiat money, and what are the advantages and disadvantages of each? A) Commodity money is paper currency with no intrinsic value, while fiat money is backed by tangible assets like gold; advantages of commodity money include stability, while disadvantages include limited supply. B) Commodity money is backed by tangible assets like gold, while fiat money has no intrinsic value; advantages of fiat money include flexibility, while disadvantages include the potential for inflation. C) Commodity money is a type of cryptocurrency, while fiat money refers to physical currency. D) Commodity money and fiat money are identical concepts with no differences.

How does the concept of commodity money differ from fiat money, and what are the advantages and disadvantages of each? A) Commodity money is paper currency with no intrinsic value, while fiat money is backed by tangible assets like gold; advantages of commodity money include stability, while disadvantages include limited supply. B) Commodity money is backed by tangible assets like gold, while fiat money has no intrinsic value; advantages of fiat money include flexibility, while disadvantages include the potential for inflation. C) Commodity money is a type of cryptocurrency, while fiat money refers to physical currency. D) Commodity money and fiat money are identical concepts with no differences.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter16: Monetary Policy

Section: Chapter Questions

Problem 1SQP

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Money serves three functions in the economy: medium of exchange, unit of account, and store of value. Which of the following statements describes how inflation affects the ability of money to serve as a unit of account? Check all that apply. Inflation erodes money's purchasing power. In some countries with hyperinflation, prices are posted in terms of U.S. dollars rather than the local currency, even though the local currency is still used to purchase the good. Inflation causes menu costs.
Which of the following will cause the demand curve for money to shift to the right? (a) An increase in real Gross Domestic Product (GDP).(b) A decrease in the repo rate.(c) An increase in the quantity of money available.(d) A decrease in the quantity of money available.
Money serves three functions in the economy: medium of exchange, unit of account, and store of value. Which of the following statements describes how inflation affects the ability of money to serve as a unit of account? Check all that apply. In some countries with hyperinflation, prices are posted in terms of U.S. dollars rather than the local currency, even though the local currency is still used to purchase the good. Inflation erodes money's purchasing power. Inflation causes menu costs.
Which of the following statements represent a use of money that is not consistent with its definition? "I got some money at the ATM with my debit card," "I just used my credit card as money to buy a new television." "I wrote a check on my deposit account to pay for dental services." "I will accept either currency or gold as money for the purchase of my house."
Money serves three functions in the economy: medium of exchange, unit of account, and store of value. For each of the following statements about inflation, indicate which function of money inflation is hindering. Statement Store of Value Unit of Account Medium of Exchange Inflation erodes money's purchasing power. Inflation causes menu costs. In some countries with hyperinflation, prices are posted in terms of U.S. dollars rather than the local currency, even though the local currency is still used to purchase the good.
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