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macroeconomics > the value of money > Flashcards

the value of money Flashcards

1
Q

for krypto to become money it must

A

-SOV
-MOE
-UOA
-standard of deferred payment

it is not MOE because it is not accepted as payment everywhere

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2
Q

market value/price giving it up will yield you

A

profits

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3
Q

what is an assets intrinsic value is given by

A

the present vaue of all benefits associated with its indefinite, future ownership

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4
Q

IV is

A

owning

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5
Q

nominal IV

A

owning house then renting it out

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6
Q

real IV

A

living in house you own

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7
Q

what is best way to utilize house as asset

A

living in it then renting out a room

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8
Q

do stocks have real IV

A

very little real IV unless you own a lot

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9
Q

what is real IV of stock

A

owning a lot of stock (over 50%) which gives you decision making power in company

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10
Q

nominal IV of stock

A

money stock makes you dividends

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11
Q

real IV of art

A

eye of beholder/joy you get looking at it

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12
Q

nominal IV of art

A

if you own Mona lisa, someone is willing to pay to borrow it/see it

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13
Q

main value of cash is

A

trading it not holding it

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14
Q

real IV of cash

A

burning it

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15
Q

nominal IV of cash

A

nothing because $ loses purchasing power, physical so does not acrue interest

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16
Q

does cash have IV

A

no

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17
Q

nominal MV

A

what youre selling someone buys

18
Q

real MV

A

money = way to buy goods + services

19
Q

par

A

exchange rate for 1:1 (ex in US economy despoits and cash)

20
Q

2 kinds of money that don’t exchange as par

A

dollar + bitcoin

21
Q

exchange rate

A

nominal market value of one currency expressed in terms of another dollar

22
Q

interest rate is

A

echnage rate between current dollars and future dollars

23
Q

why is it banks best interest to accept dollars as payment

A

because it has legal tender

24
Q

Do US businesses have to accept USD as payment

A

no (federally speaking no mandate)

25
Q

why do we care dollars have nominal market value

A

ultimately to echnage for goods and services wnat other dollars because they have makret value

26
Q

legal tender

A

less echange rate risk/less volatility like bitcoin

27
Q

whichof the four functions of money is legal tender related to

A

SDP - can pay your debts with it

leans to it bieng mean of exchange

28
Q

keynes three main motives

A

transaction, precautionary, speculative

29
Q

trasnaction motive

A

need money

30
Q

precuationary

A

hold near money like assets

31
Q

speculative motive

A

money = bad SOV long term
-don’t hold money like that

32
Q

why are people less willing to hold as much money

A

because interest rates = people will buy tsocks iwth it

33
Q

why does dollar bill have no IV

A

niether yields a future cash flow nor any sort real utility

34
Q

as long as it has market value it is

A

bubble

35
Q

whats the risk when MV exceeds IV

A

you know market vaue level is higher than IV but still want to buy becaise you dont know when bubble will pop, so hope MV will continue to go up. Risk is if bubble pops right away especially if you know IV is much lower

36
Q

what would you do if MV falls below IV

A

buy because price will go back up if you believe IV will revert backp

37
Q

paul krugman bubble

A

cash is not a bubble because it is not based on inconsisnte view of the future

38
Q

who has most accurate view of bubble

A

robert shiller

39
Q

robert shiller bubble

A

-bubble is typically positive
-spplies to game stop, bitcoin early on, does not apply to money

40
Q

formal def of bubble

A

MV>IV

41
Q

informal bubble def
-p kriggy
-dr doom

A

-inconsistnet views about future
-social epidemic featring successive feedback loops

42
Q
A

macroeconomics (26 decks)

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