Due February 11, 1998
1. All of us are familiar with paper currency and coins as money in our society. However, commodities such as wheat, tobacco, and others have also been used as a form of money in the history of mankind. Suppose you were transported back in time to a civilization where paper currency does not exist. How would you convince the public that gold coins would be a better form of money than wheat (the official money)? On you way back to your own century, you met a fellow time traveler, John, and he told you that he just came back from an ancient civilization. John proudly claims that he successfully convinced the public to switch from gold coins to paper currency as the official form of money. What kind of arguments do you think John used to convince the public that paper currency is a better form of money? Hint: Think about the different characteristics a commodity needs to possess in order to become a good form of money. You only need to pick three of the characteristics. Make sure you argue your position fully.
2. You have learned the various definitions of money used by the U.S.
government to measure money, i.e. M1, M2, and M3. Although the Christmas
season has been more than a month ago, you are curious if the various compositions
of money changed going into the Christmas buying season. |