Should the issuers be subject to reserve requirements

Assignment Help Microeconomics
Reference no: EM13218953

A smart card, also known as an electronic purse, is a plastic card that can be loaded with a monetary value. Its developers argue that, once widely accepted, it could replace the use of currency in vending machines, parking meters, and elsewhere. Suppose smart cards came into widespread use. Present your views on the following issues:

a.Would you count balances in the purses as part of the money supply? If so, would they be part of M1? M2?

b.Should any institution be permitted to issue them, or should they be restricted to banks?

c.Should the issuers be subject to reserve requirements?

d.Suppose they were issued by banks. How do you think the use of such purses would affect the money supply?

Reference no: EM13218953

Questions Cloud

Calculate the sacrifice ratio : Inflation in years 1-5 equals 3.1 percent, 2.2 percent, 1.6 percent, 1.3 percent, and 1.1 percent, respectively.
Were goldsmiths engaging in fractional reserve banking : In the Middle Ages, goldsmiths took in customers' deposits (gold coins) and issued receipts that functioned much like checks do today. People used the receipts as a medium of exchange. Goldsmiths also issued loans by writing additional receipts ag..
What are three examples of bias in business writing : What are three examples of bias in business writing? identify two strategies you consider to use when working to reduce bias in business writing.
Define detoxified and capable of generating revenues : Bruce Company owns a plot of land on which buried toxic wastes have been discovered. Since it will require several years and a considerable sum of money before the property is fully detoxified and capable of generating revenues,
Should the issuers be subject to reserve requirements : A smart card, also known as an electronic purse, is a plastic card that can be loaded with a monetary value. Its developers argue that, once widely accepted, it could replace the use of currency in vending machines, parking meters, and elsewhere.
What is class of trade : What is "class of trade"? How many classes of trade are there in the pharmaceutical Industry in USA?
Calculate the s/n ratio for a receiver output : Calculate the S/N ratio for a receiver output of 4 V signal and 0.48 V noise both as a ratio and in decibel form. (69.44, 18.42dB)
Find the power being absorbed : A current source of 12 cos 2000t A, a 200-ohm resistor, and a 0.2-H inductor are in parallel. Assume steady-state conditions exist. At t = 1 ms, find the power being absorbed by the (a) resistor; (b) inductor; (c) sinusoidal source.
Discuss the importance of sleep and your circadian rhythms : Discuss the importance of sleep and your circadian rhythms. Discuss the effects of culture on our views of personality

Reviews

Write a Review

 

Microeconomics Questions & Answers

  Estimate equilibrium price and quantity

The box industry was perfectly competitive. The lowest point on long run average cost curve of each of identical box producers was dollar four, and this minimum point occurred at an output of 1,000 boxes every month.

  How would they allocate workers to the two sectors

Suppose the two countries are not trading and that both desire to have equal numbers of feet of timber and baskets of fruit. How would they allocate workers to the two sectors?

  Calculate the elasticity of demand for good x

Calculate the elasticity of demand for good X with respect to advertising on good X. Interpret your answer. Can you tell whether the firm is spending too much or too little on advertising?

  Explain factors that shape wage differentials

Institutional economics, especially applied to metropolitan areas, highlight problems with human capital theory and help us better understand wage differentials. Explain factors that shape wage differentials by metropolitan areas.

  How to keep real income constant

You heard that you are being transferred to California where housing is 50% more expensive. In negotiating a new salary, your objective is to keep your real income constant.

  Determine what will the new equilibrium price

Assume the following data describe the gasoline market: Price per gallon $2.00 2.25 2.50 2.75 3.00 3.25 3.50 Quantity Demanded 32 30 29 28 22 21 20 Quantity Supplied 16 20 24 28 32 36 40 (a) What is the equilibrium price?

  Price discrimination to maximize profits

How does knowledge of value elasticity between different groups of consumers or for several products enable managers to price discriminate, change different prices for these groups?

  What happens if the economy is producing a level of output

we know that when an economy starts out at long-run equilibrium and the government cuts taxes, this will result in inflation int he long run. what happens if the economy is producing a level of output below the full employment (long run equilibriu..

  Deriving the supply curve

Consider the relationship given by QCars = 100 + 4xPCars - 2xPSteel - 0.2xPWorkers, where QCars is the quantity of cars (in thousands), PCars is the price of cars and PWorkers is the wage earned by autoworkers.

  Describes the retail market for electricity

Which of the following statements best describes the retail market for electricity - Estimate the (own) price elasticity (of demand).

  Fluctuating prices in gasoline

Determine what are the reporting reasons on why gasoline prices have been fluctuating and trending upward for the past twelve months.

  How much you paid for the car when you bought it

car breaks down and you are deciding to have it repaired. The most relevant issue in this economic decision is:A. How much you spent on past repairs on the car B. How much you paid for the car when you bought it

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd