Some government bonds can be redeemed for currency or a check at banks. Why, then, isn’t it universally agreed that government bonds are money?
What will be an ideal response?
The question literally answers itself. These assets must be exchanged for currency or a check (which is money by definition) before they are generally acceptable in exchange for goods and services. While they can be exchanged for currency or a check, bonds are one step removed from being spendable as money.
You might also like to view...
Worker surplus can be measured as an area on the market labor supply curve if worker tastes are quasilinear in leisure.
Answer the following statement true (T) or false (F)
An application of behavioral economics is:
A. price inconsistency. B. rational cost-price decision making. C. forgetting the fungibility of money. D. All of these are applications of behavioral economics.
In a monopsonistic labor market, workers are paid a wage:
a. below their MRP. b. equal to the intersection of MRP and S. c. equal to the MFC. d. equal to the price of the output. e. above their MFC.
The total public debt as a percentage of GDP for the United States in 2011 was in the vicinity of
a. 25 percent. b. 70 percent. c. 90 percent. d. 120 percent.