Which of the below statements DOES NOT CORRECTLY capture the meaning of the word "money" as economists use the term, and as Charles Wheelan explains the term? Group of answer choices   Whatever serves as money must be available in abundance, and must not be scarce.   It serves as a medium of exchange, something that facilitates trade and transactions.   It serves as a unit of account, so that the costs of all kinds of goods and services can be measured can be compared using one scale.   Whatever serves as money must be portable and durable.

Explain exogenous versus endogenous money supply with the help of diagrams

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Which one of the following statements regarding the demand for money is correct?  (a)  A positive relationship exists between the quantity of money demanded and the prevailing interest rate in an economy;  (b)  The demand for money is made up of the sum of all the money balances that participants in the economy would like to have;  (c)  For a given interest rate, an increase in nominal income increases the demand for money;  (d)  Two key factors that impact on the demand for money by individuals are savings and investments available to participants.

Discuss when and why money supply cannot be seen as exogenously given.

In the situation depicted above, an increase in the money supply from $100 billion to $150 billion will cause the equilibrium rate of interest to:   Group of answer choices   a)Decrease from 4 percent to 2 percent.   b)Increase from 2 percent to 4 percent.   c)Decrease from 6 percent to 2 percent.   d)Increase from 4 percent to 6 percent.   e)Decrease from 6 percent to 4 percent.

In a less-developed economy, cattle is widely accepted as payment for goods and services. Nearly all goods and services are priced in terms of cattle; however, cows vary in quality, become less valuable with age, and are difficult to move over long distances. Which of the following functions of money do cattle provide? Select the two correct answers.     portability   uniformity   medium of exchange   unit of account   store of value

The Bring it Home Feature discusses the use ofcowrie shells as money. Although we no longer usecowrie shells as money, do you think other forms ofcommodity monies are possible? What role mighttechnology play in our definition of money?

Attempt the following multiple choice questions: 1. The velocity of money represents: (a) Whether individuals are increasing or decreasing the quantity of money spent in an economy (b) The quantity of money available in an economy (c) The level of prices determined by the equation of exchange (d) How often money is used in a specific period of time (e) Whether currency is accepted as a medium of exchange in an economy 2. According to the quantity theory of money, (a) Increases in the money supply will lead to inflation, ceteris paribus (b) The level of inflation is independent of the money supply (c) The money supply times the velocity equals the real GDP (d) When real GDP rises, the money supply must fall by the same proportion (e) The velocity of money is assumed to fluctuate widely over time 3. Monetarists differ from Classical economists in their view of money in that monetarists believe: (a) The velocity of money is relatively constant over time (b) Prices are not influenced by…

For this discussion I want you to think of an item (a piece of capital) that a firm could invest in to make profit. The purpose of this discussion is to help understand how the process of commercial banks making loans to firms increases the money supply. In the textbook it seems like the process of banks making loans and firms paying those loans back happens instantaneously. However, in reality that process takes time (several years). Typically, loans are re-paid over 10, 15, or even 30 years. The firms use profits from new business opportunities, opportunities they would not have had without the loan, to repay the bank over time. Describe a piece of capital a company might want to purchase by taking out a loan from a bank. Explain how having this new piece of capital would improve profits for the firm. How does the real interest rate impact the firm’s decision to take out the loan? How does the corporate tax rate impact the firm’s decision to take out the loan? Example: A chef, who…