If there was no item in the economy widely accepted in return for goods and services, how would transactions be made? How efficient would such a system be?
(ii) What is the difference between a medium of exchange and a store of value?
(iii) What is the difference between commodity money and fiat money?
(iv) Are credit cards money?
(v) Under what circumstance can banks not influence the supply of money?
1b. If Coke sells for $1.20 Canadian and for .75 pounds in the U.K., determine what the exchange rate should be if purchasing power parity holds.
1c. What are the two problems facing the Bank of Canada in trying to control the money supply precisely?