Imagine this: each community in the country is suddenly responsible for designing its own local commodity-based financial system, and you have been assigned the task of choosing what commodity your community will use and how it will be implemented.
Please answer:
Question 1. What commodity would you choose, and why would it work for your community?
Question 2. In your commodity-based system, what would be the price for a gallon of milk? How did you come up with this price?
Question 3. In this system, who would the financial intermediaries be?
Question 4. What are the inevitable limitations of this system, particularly when it comes to dealing with trade to other communities?
Question 5. When looking at commodities, you will find that these are things that have particular value. Why do we want to consume more commodities when there is inflation?