Economics Answers

What are the 3 properties that make up the value of money?

Grandpa wants to renew his auto insurance. Let us suppose he can buy either a natural monopoly (no-fault) one or an oligopoly (liability). As a student in big business economics,
(a) What are four basic differences on pricing, risk, and premium
(b) Which one is better on:
- Efficiency ground and
- Equity ground

Task 1 – Commercial banks in United Economy have total deposits of AED 300 billion. Their reserves are AED 15 billion, two- thirds of which are with the Central Bank as deposits. There are AED 30 billion notes outside the banks. There are no coins!

Calculate-
a) The monetary base.
b) The banks’ reserve ratio.
c) Currency drain as a % of deposits.

Following the recession years of 2007/2009, California faced a big drop in state taxes and responded with fiscal policies (it shut down state parks, increased tuition and fees in State and Community Colleges, laid off workers, and postponed projects). Some have argued that the State should have increased taxes on the rich and big business (fiscal policy). Others, have argued that the State should have sold bonds (monetary policy).
a. What do think would have been the best (of the three possibilities)?
b. Explain

In which way does laundered money affect the current account and the capital accounts of the drug exporting or drug-importing nation? [think capital inflows and capital outflows] What is the impact on prices of other goods? Living standards? The value of the US dollar? Legitimate businesses?

5. What is Money?
A. What is value of Money?
B. Explain

Many economists pointed out that in the ...
dramatically.
A. Why would V fall?
B. What would this do to Q or P (= MV, or V=PQ/M)?
C. Is your answer consistent with what actually happened?
D. Explain

According to the equations PQ=MV and Q; ...
wants to stimulate the economy [increas...
A. Increase (Decrease) M by selling (buying...
i. Gold
ii. Stocks
iii. Bonds
iv. Dollars
v. All (none) of the above
B. What can go wrong?
C. Explain how this works.

1. Consider this equation for M2 GDP = PQ = MV
A. What is P?
i. List some of the things that make it change
B. What is V?
i. How does it change?

According to the equations PQ=MV and Q; If the Central Bank of a country
wants to stimulate the economy [increase Q] during a recession it must:
A. Increase (Decrease) M by selling (buying)
i. Gold
ii. Stocks
iii. Bonds
iv. Dollars
v. All (none) of the above
B. What can go wrong?
C. Explain how this works.

1. Consider this equation for M2 GDP = PQ = MV
A. What is P?
i. List some of the things that make it change
B. What is V?
i. How does it change?