Question

In: Economics

- A news article in 2015 noted, ‘A rising number of Greeks in rural areas are...

- A news article in 2015 noted, ‘A rising number of Greeks in rural areas are swapping goods and services in cashless transactions since the government shut down banks on June 28 for three weeks’ (Karagiannopoulos, 2015). If Greeks were able to swap goods and services for other goods and services, did it matter that currency was not available because the banks had been closed? Briefly explain

- Explain why Australia’s currency is suitable to use as a medium of exchange

Solutions

Expert Solution

1) If Greeks are able to swap goods and services for goods and services, then it would be a case of double coincidence of wants.

Yes, it does matter that currency is not used as a medium of exchange because goods would be valued in terms of money which makes transaction easier, it is portable and divisible.

In case of goods and services, the first important aspect would be the fact that the goods would be exchanged only when both the people trading them require the other good ie double coincidence of wants. This requires sufficient time and energy and transportation cost or the searching costs . This would make the transaction less effective than had the exchange being done with money.

2) Australia's currency is suitable to use as a medium of exchange because it has the following characteristics:

It is a legal tender and is accepted because people know that everyone else in Australia is also accepting it as form of money.

It is easy to carry, is divisible, has no transportation cost etc.

Its value remains constant ie unlike goods ,it has longevity. It is not perishable unlike fruits and vegetables.

The goods and services could be measured in terms of the currency.

There is no double coincidence of wants and hence the time and value to buy and sell goods is saved.

So because of these reasons the Australian currency would be a medium of exchange.

(You can comment for doubts)


Related Solutions

A die is thrown twice and the sum of the numbers rising is noted to be 6.
  A die is thrown twice and the sum of the numbers rising is noted to be 6. Calculate the is the conditional probability that the number 4 has arrived at least once?
a strong thesis statement for the challenges and opportunities in rural areas.
a strong thesis statement for the challenges and opportunities in rural areas.
Recent news articles have noted that women are "a crucial part of society and they are...
Recent news articles have noted that women are "a crucial part of society and they are an untapped resource."*) From your point of view, what impact will more women participation in the world economy have on the global GDP? Explain with a minimum of 150 words. You must post your own response before you will be able to see other students' posts. Provide at least one thoughtful response to a fellow student's post. *) Dallas Morning News October 1, 2015.
How is practicing health care and public health different in rural areas than in urban areas?  What...
How is practicing health care and public health different in rural areas than in urban areas?  What do you think would be the most effective way to retain healthcare workers in rural areas?
In India, roughly 68.84% of the population live in areas that are roughly designated as rural....
In India, roughly 68.84% of the population live in areas that are roughly designated as rural. In addition, only 67% of the rural population have access to the grid while 94% of the non-rural population have access to power grid. (a) What is the probability that anybody has access to the grid? Show evidence. (b) What is the probability that a person lives either in a non-rural area, or has access to the grid or both? Show evidence. (c) Are...
It has been suggested that residents in the rural areas of the South have a different...
It has been suggested that residents in the rural areas of the South have a different life-span than in the North. In a random sample of 50 residents of the rural South, the mean life span was 75.9 with a sample standard deviation of 9.8. A random sample of 75 residents of the North, the mean life span was 82.4 with a sample standard deviation of 6.1. Is the sample evidence strong enough to claim that those in the South...
A few years ago, A CBC News story, noted how a a small – but increasing...
A few years ago, A CBC News story, noted how a a small – but increasing – number of employees are beginning to accept Bitcoin as payment for their wages. This is evidence perhaps of the growing acceptance of Bitcoin by merchants and the increasing discussion of Bitcoin currency exchanges. Bitcoin began in 2009, and has been gaining more widespread attention and gaining in acceptance. (See this link for a short video on Bitcoin’s operations). Shrad Rao, the CEO of...
Find a news article that discusses raising capital or an IPO, The article should be no...
Find a news article that discusses raising capital or an IPO, The article should be no more than 12 months old. Summarize the article and analyse the impact on the company the article is choose from.
A hot topic in today’s news is the rising cost of health care and how we,...
A hot topic in today’s news is the rising cost of health care and how we, as a country can provide health coverage. Is healthcare a right or choice? Do you believe health care should be regulated and government funded? Or do you believe health care should be provided by the private sector and allow competition to manage the risk and access of healthcare. In addition, what are some viable alternatives to this problem? What implications might these alternatives have...
Aiming to boost the economy within rural areas of Ontario, the Government of Ontario invested on...
Aiming to boost the economy within rural areas of Ontario, the Government of Ontario invested on a new initiative named Canada Rural Partnership (CRP). Two consultancies won the bid to undertake this project: Innovation Pursuit (IP) and North Consultancy (NC). IP supported far northern communities and NC supported rural areas. IP and NC’s goal were to: Initiate collaboration between rural communities and stakeholders to address barriers and challenges to local development Prepare information and tools used by rural communities and...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT