Explain why gold, despite its value, is difficult to use as a medium of exchange
What will be an ideal response?
Gold is an example of a commodity money. With a commodity money, its value depends on the quality of the commodity. Gold is not necessarily standardized, so its quality can vary. The less pure gold is, the less value it has, and since purity can be difficult to readily check, it would be difficult to use as an accurate medium of exchange.
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Assume good X is produced in a monopolistically competitive market. In addition, each of the firms in the industry uses essentially the same technology. Competitors distinguish their individual products primarily through persuasive advertising
Assume that one of the firms in the market discovers a new production process that substantially reduces the average costs of production. Analyze the effects of this discovery on long-run equilibrium in the market.
According to the long-run Phillips curve, which of the following will be the end result of an expansionary monetary policy when unemployment is at its natural rate?
a. Zero inflation b. Deflation c. A constant level of potential real GDP d. A decrease in unemployment e. An increase in unemployment
If a country has a comparative advantage in wine moved from autarky to free trade, this would cause what reaction in the world market?
A. Domestic wine consumers would be opposed. B. Domestic wine consumers would not be influenced. C. Foreign wine producers would be opposed. D. Domestic wine producers would be opposed.
Which of the following statements about private and social costs is TRUE?
A) Social costs include externalities. B) Private cost do not include externalities. C) Social costs are never smaller than private costs. D) All of the above.