Trading Experiment. Instructions Assign type Assign trading location. Trading Experiment. Questions for Discussion What trades were you willing to make and why? Did you have a particular trading strategy, and if so, what was it?
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Questions for Discussion
Economist’s Meaning of Money
1. Anything that is generally accepted in payment for goods and services
2. Not the same as wealth or income
Functions of Money
1. Medium of exchange
2. Unit of account
3. Store of value
Criteria for commodity Money
Examples: cigarettes, booze, gold, clams etc.
Problems and issues with commodity money:
Seigniorage (The difference between the money value of money and the cost of production)
Gresham’s Law- “Bad money chases out good money”