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Explain the three functions of money

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Question 1: Explain the three functions of money. Are cryptocurrencies (like Bitcoin) money?

Question 2: Use a diagram, where the value of money is on the y-axis (LHS), the quantity of money is on the x-axis and the price level is on the y-axis (RHS) to show how the value of money, and the price level are determined. Explain what happens to the price level and the value of money when the money supply DECREASES from an initial equilibrium where money demand equals money supply.

Question 3: If you were a consumer would you prefer inflation or deflation? If you were a firm would your answer be the same? Explain your answers.

Question 4: Identify and explain at least FOUR of the traditional costs of inflation.

Reference no: EM132548614

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