Elucidate the use of money as a medium of exchange
Elucidate the use of money as a medium of exchange in Market System?
Expert
1. Money substitutes for barter, which requires a coincidence of wants. (I may want what you produce but you may not want to exchange for what I have.)
2. Willingness to accept money in place of goods permits 3-way trades (or multilateral trades).
a. Floridians give money to Nebraskans for wheat who give money to Idahoans for potatoes who give money to Florida for oranges.
b. Foreign exchange markets permit Americans, Japanese, Germans, Britons, and Mexicans to complete international exchanges of goods and services.
c. Detroit autoworker produces crankshafts for Buicks. If the worker were paid in crankshafts, he would have to find grocers, clothing retailers, etc., who would be willing to exchange their products for a crankshaft. It is much more efficient to use money wages than to accept one’s wages in crankshafts!
Distinguish between Individual as well a market demand?
Question: In June 2005, a Big Mac sold for 6,000 pesos in Colombia and $3.00 in the United States. The exchange rate in June 2005 was 2,300 pesos per US Dollar. So, on Big Mac purchasing power parity gr
“An increase in the American dollar price of the South Korean won implies that the South Korean won has depreciated in value.” Explain.
How will the goods and services be produced?
Definition of “Full Employment”?
The “invisible hand” of the marketplace is a word referring to consider as: (w) government policies to set market prices at equilibrium levels. (x) speculative manipulations which create disequilibrium. (y) automatic adjus
Question The Current Account captures international fund flows due to net income on (past) investments, net transfers, and i._______________________________, general
Explain the statements: The market system not only accepts self-interest as a fact of human existence.
How can we calculate Price earnings ratio?
Transaction costs to ultimate consumers are reduced if: (w) consumers travel long distances to buy directly from manufacturers quite than buying the goods at local retail stores. (x) intermediaries generate income while conveying goods from manufactur
18,76,764
1947396 Asked
3,689
Active Tutors
1429499
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!