Answer to Question #192223 in Marketing for saleemaslam

Question

1.     Can packs of cigarettes be used as commodity money?

2.     Data show that an average Canadian and American citizens hold CA$1500 and US$2000 of their currency respectively. Since money is bulky, it can be stolen, pays no interest and in general we do not see our fellow Canadians holding $1500 in their pockets, where are these dollars and who is holding them?

1.     An electronic payments system has not completely replaced the paper payments system because of all of the following reasons except ________.

A)   expensive equipment is necessary to set up the system

B)   security concerns

C)   privacy concerns

D)   transportation costs

Answer 1

answer to question 1

No, a packet of cigarettes is not a legal tender and therefore cannot be used as commodity money. However, in certain scenarios, people can agree to do barter trade with a packet of cigerate being exchanged for another item on mutual agreement between the parties involved

answer to question 2

The Dollars are held by the respective country national reserve which is regulated by the central bank of each nation. The reserve is usually kept in non-currency form like gold minerals and other precious metals. The more the country has in its reserve the richer the citizens will be presumed

1.     An electronic payments system has not completely replaced the paper payments system because of all of the following reasons except ________.

A)   expensive equipment is necessary to set up the system

B)   security concerns

C)   privacy concerns

D)   transportation costs

Correct answer is D. (Transportation costs)