Despite the fact that personal possession of currency is not allowed by U.S. prisons, in reality, incarcerated people still exchange goods and services. Until 2003, the year in which the U.S. government banned smoking in federal penitentiaries, cigarettes were the preferred medium of exchange among prisoners. A main difference between using cigarettes and using dollars as money is that have intrinsic value. U.S. dollars are an example of money.

Despite the fact that personal possession of currency is not allowed by U.S. prisons, in reality, incarcerated people still exchange goods and services. Until 2003, the year in which the U.S. government banned smoking in federal penitentiaries, cigarettes were the preferred medium of exchange among prisoners. A main difference between using cigarettes and using dollars as money is that have intrinsic value. U.S. dollars are an example of money.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter25: Money, Banking, And The Federal Reserve System

Section: Chapter Questions

Problem 1P

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Personal possession of currency is prohibited in U.S. prisons, although, in practice, prisoners still exchange goods and services. U.S. prisoners used cigarettes as a medium of exchange until smoking was banned in U.S. prisons in 2003. After 2003, prisoners looked to other items on the commissary menu to facilitate exchange. In 2008, the Wall Street Journal reported that energy bars had caught on as money in some U.S. prisons. One important difference between using energy bars and using dollars as money is that____ have intrinsic value. Energy bars are an example of ___ money.
In the mid 1800's, grain sellers in Chicago would deliver their grain to warehouses and receive a paper receipt that represented their claim on the grain in storage. These receipts became so widely used that grain traders began to use them as money, and they would use the warehouse receipts to settle debts and as collateral to secure short-term loans. Despite their widespread use as a form of currency, the warehouse receipts were not fiat money because: A. Grain is a commodity, so the receipts were commodity money and not fiat money B. The receipts were not legal tender formally recognized by a government
Despite the fact that personal possession of currency is not allowed by U.S. prisons, in reality, incarcerated people still exchange goods and services. Until 2003, the year in which the U.S. government banned smoking in federal penitentiaries, cigarettes were the preferred medium of exchange among prisoners. A main difference between using cigarettes and using dollars as money is that have intrinsic value. Cigarettes are an example of money.
Before the introduction of money, there was a system of trade called the barter trade. Discuss the importance of barter trade in relation to the time it existed.? Do you think barter trade in spite of the use of money today holds any value in modern times? What is money?
A main difference between using cigarettes and using dollars as money is that have intrinsic value.
2. Throughout history, gold has been used as a medium of exchange. Gold ingots, gold coins, gold bars, whatever. a. Why do you think other commodities were not used as a medium of exchange for the same length of time? For example, think about why diamonds were seldom used as money. b. Why do you think paper fiat currency replaced gold? c. Is there a transaction cost problem with paper money? If so, explain how. If not, explain why not.
Gold and silver have been historically used as materials for making commodity money (coins) by many different human cultures throughout history. This was because they were difficult to obtain and less prone to rust than other metals. In other words, they could perform one of the functions of money better than other metals. Which function is that? Which function of money do gold and silver perform better than other metals? a. Unit of account b. Store of value c. Medium of exchange d. Standard of deferred payment
3. The kinds of money Personal possession of currency is prohibited in U.S. prisons, although, in practice, prisoners still exchange goods and services. U.S. prisoners used cigarettes as a medium of exchange until smoking was banned in U.S. prisons in 2003. After 2003, prisoners looked to other items on the commissary menu to facilitate exchange. In 2008, the Wall Street Journal reported that energy bars had caught on as money in some U.S. prisons. One important difference between using energy bars and using dollars as money is that v have intrinsic value. U.S. dollars are an example of money.
#28.The primary difference between commodity money and fiat money is that a fiat money is a medium of exchange but commodity money is not. b fiat money has intrinsic value but commodity money does not. c commodity money is a medium of exchange but fiat money is not. d commodity money has intrinsic value but fiat money does not.
Which of the below statements DOES NOT CORRECTLY capture the meaning of the word "money" as economists use the term, and as Charles Wheelan explains the term? Group of answer choices Whatever serves as money must be available in abundance, and must not be scarce. It serves as a medium of exchange, something that facilitates trade and transactions. It serves as a unit of account, so that the costs of all kinds of goods and services can be measured can be compared using one scale. Whatever serves as money must be portable and durable.
International Gold Standard (19th century): If different countries fix the price of their currencies e in terms of gold this immediately implies that e are fixed. If the Central Bank of two countries stand ready to buy and sell gold at a fixed price in terms of their respective domestic currencies, then there is only one value of e that eliminates the possibility of arbitrage. Suppose that S100 buys 1 ounce of gold and 100 pounds buys lounce of gold. Under fixed exchange rates, this implies that IS buys Ipound. Explains what would happen (arbitrageurs' action and result) if instead e-1S buys 2 pounds
Money is used as a means to make a payment, store of value (savings), and place value on goods and services most economist believe money contributes to economic growth and development by make it easier for people to complete their transactions. Barter is the exchange of goods and or services without the use of money. However, "if money did not exist we would invent it" as stated by some economists.What is the function of money?Discuss how money contributes to economic growth and\or development?If there is no money will society find a way to exchange goods and services without it? Explain.