Questions tagged [money]

any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment. Any item or verifiable record that fulfills these functions can be considered as money.

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How Africans use their wages?

I was researching poverty in Africa and was reading about their daily wages. Based on the article linked, 2/3 of Africans live on less than $1.25 USD, a day. However, what this article and many ...
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Did the robbers from Money Heist real steal noone's money?

Money Heist (original Spanish title: La Casa de papel) is a Spanish TV show about a bank heist. From Wikipedia (bolding mine), In Money Heist, a mysterious man, known as "The Professor", is ...
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Is there a clear timeline of ECB/Eurosystem's changes to the defintion of M3 (with regard to repos)?

I found that circa 2012 the ECB/Eurosystem changed their definition of M3 to exclude at least some repos, which previously were included. According to a 2014 Bundesbank publication, the change ...
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Real Income and a Fixed Money Supply

What would happen to nominal income and wages if the money supply were fixed (100% reserve banking). Would real wages increase, even though nominal wages would stay the same or even decrease?
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Friedman's version of money multiplier formula

In his Quantity Theory of Money article M. Friedman uses the following formula for the money multiplier: $$ M = H \times \frac{\frac{D}{R}(1 + \frac{D}{C})}{\frac{D}{R}+\frac{D}{C}} $$ where $M = $ ...
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Money in New Keynesian models

I have been doing some reading on general equilibrium theory and it has made me highly confused regarding the logic behind NK models. If I have understood correctly, NK models are based on Walrasian ...
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Sources of the endogeneity of money in New Keynesian economics (Woodford)

I am trying to wrap my head around Woodford's "Interest and Prices" so I have a question regarding the source of the endogeneity of the money supply in his models. The Post Keynesian view is that ...
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1answer
100 views

Can the US dollar collapse and what are steps that I should take in the event that this happens?

A friend of mines says that the US dollar is so "heavily intertwined" in other nations that if the US Dollar was to become worthless then that would have a major impact on the world. However with ...
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Question on Dichotomous system

In The Classic economy, we consider the following macroeconomic model $$Y=F(K,N)$$ where $F_N>0$, $F_K>0$, $F_{KK}, F_{NN}<0$ and $F_{NK}>0$ $$F_N(K/N)=w/p$$ The labor supply function is $$...
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What did Jevons mean by this quote?

Jevons (1875): Currency is to the science of economy what the squaring of the circle is to geometry, or perpetual motion to mechanics. I can't make any sense of this quote. I know that the "...
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What happens if a country omits the zeros of it's current money?

I mean, for example, the government changes all x10000 to x1; where x equals to currency of the respected country (Dollar, for instance).
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What is the impact of money “sent” to another country?

I've been thinking about this a lot and I am not sure I have understood correctly. I was thinking about, for example, migrant workers who send a portion of their income back home, or wealthy ...
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3k views

Effect of risk premium on the money demand (LM curve)

In short, I'm having problems understanding the LM curve, as the explanation given by the picture is for me, the 4th row is counter intuitive. When risk premium increases it causes the interest rates ...
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29 views

Why is money used in transactions when it is dominated as a store of value?

In Lectures on Macroeconomics by O.Blanchard and S.Fisher (1993) stated that (the emphasize is mine): Building a model that formally explains why money is used in transactions when it is ...
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112 views

Effects of variables on the demand for money?

I need verification on my understanding as to whether the following factors affect the demand for money, and if so how they affect it: Changes in Nominal National Income: will affect the transactions ...
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33 views

How does the private bank reserve increase when money is being withdrew?

The federal government raises 400 million by selling bonds to the general public in order to pay for a construction program. The program cost 440 million so the government withdraws 25 million from ...
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60 views

What is the “natural rate of interest” vs. “money interest rate”?

What exactly is the distinction that Knut Wicksell made in his Interest & Prices between "natural rate of interest" or "natural interest" ("der natürliche Kapital zins") and the "money rate of ...
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54 views

A country with dual payment system

Is there any country with dual domestic payment system? For instance, in the USA there are CHIPS or Fedwire both help wire transfer of USD within the USA. They give services to international ...
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How does the size of the largest cryptocurrency compare to the largest traditional currency?

'Money' has evolved throughout economic history, and has included moving from: barter economies (i.e. no 'Money' - simple trading of final goods/services) commodity money - money whose intrinsic ...
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How online payment services system work?

Nowadays, online payment services like Transferwise, Payoneer and Paysera have been widely used. It enables people outside US to receive payment from companies. These services gives you a bank account ...
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1answer
58 views

How does total money in the economy changes?

I don't understand why total money in economy increases. Where does this money come from?
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Does the income from a product or art count as passive income?

When a writer publishes his book, can we classify the income from the book as passive? Or another example, when a musician publishes his album, does the album generates passive income, making any form ...
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What happens if you cannot lend more than what you have?

This is hypothetical but what would happen if you cannot lend more money than you have? Say you have £100, the maximum you can lend is £100. But somehow you lend £200 to Joe, and Joe spends all of it ...
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27 views

demand for money

I am currently studying the demand for money by Blanchard. this model assumes that the amount of money held is basically related to transaction levels and the the attractiveness of bonds. i.e.: ...
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What would be the costs of declaring/legislating that Scottish banknotes be legal tender?

Bank of England: English banknotes aren’t legal tender in Scotland. Scottish notes aren’t legal tender in England or Scotland. Committee of Scottish Bankers: Scottish Bank notes are not Legal ...
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What were the effects of the 2016 Indian banknote demonetisation?

On 2016-11-08, the Government of India announced that it had: decided to cancel the legal tender character of the High Denomination bank notes of Rs.500 and Rs.1000 denominations issued by RBI till ...
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Are things any better in what society considers “third world countries” as they were years ago? If things are better, how did they improve and why?

For years I've seen non-stop commercials of countries in the continent of Africa showing kids who live in sewage huts, parents are dead, war gangs and criminals rule their lives. Like in Captain ...
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Would taxing money owned (as a share of purchasing power) be a better form of taxation?

Consider a nation whose money is entirely digital (like Bitcoin), but centralized (unlike Bitcoin). Furthermore, the total money supply is fixed, i.e. money cannot be created nor destroyed. To be ...
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Why don't we mint more m0 instead of creating m1 through fractional reserve banking?

From what I understand, m1 money is just as liquid as m0 since an individual can withdraw it from the bank at any time and in any quantity (up to the amount (s)he deposited). Because of this I don't ...