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In: Economics

A money substitute is a claim. A claim is not an economic good but a means...

A money substitute is a claim. A claim is not an economic good but a means of obtaining disposal over economic goods. This determines its whole nature and economic significance. Essentially three (3) elements are involved in the valuation and pricing of a claim. They are:

the value of the underlying asset, scarcity and utility.

scarcity, utility and accounting for the time element.

scarcity, utility and the greater or lesser probability of redemption.

the value of the underlying asset, the greater or lesser probability of redemption and accounting for the time element.

Solutions

Expert Solution

D) The value of underlying asset,the greater or lesser probability of redemption and accounting for time element

A claim is not an economic good but a mean of obtaining disposal over Economic goods.this determine it's whole nature and Economic significance .

Rahul Sunny answered 2 years ago
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