曼昆经济学原理英文版文案加习题答案29章.docx

曼昆经济学原理英文版文案加习题答案29章.docx

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曼昆经济学原理英文版文案加习题答案29章

29

THEMONETARYSYSTEM

WHAT’SNEWINTHESEVENTHEDITION:

ThereisanewIntheNewsboxon“WhyGold?

”

LEARNINGOBJECTIVES:

Bytheendofthischapter,studentsshouldunderstand:

Øwhatmoneyisandwhatfunctionsmoneyhasintheeconomy.

ØwhattheFederalReserveSystemis.

Øhowthebankingsystemhelpsdeterminethesupplyofmoney.

ØwhattoolstheFederalReserveusestoalterthesupplyofmoney.

CONTEXTANDPURPOSE:

Chapter16isthefirstchapterinatwo-chaptersequencedealingwithmoneyandpricesinthelongrun.Chapter16describeswhatmoneyisanddevelopshowtheFederalReservecontrolsthequantityofmoney.Becausethequantityofmoneyinfluencestherateofinflationinthelongrun,thefollowingchapterconcentratesonthecausesandcostsofinflation.

ThepurposeofChapter16istohelpstudentsdevelopanunderstandingofwhatmoneyis,whatformsmoneytakes,howthebankingsystemhelpscreatemoney,andhowtheFederalReservecontrolsthequantityofmoney.Anunderstandingofmoneyisimportantbecausethequantityofmoneyaffectsinflationandinterestratesinthelongrun,andproductionandemploymentintheshortrun.

KEYPOINTS:

∙Thetermmoneyreferstoassetsthatpeopleregularlyusetobuygoodsandservices.

∙Moneyservesthreefunctions.Asamediumofexchange,itistheitemusedtomaketransactions.Asaunitofaccount,itprovidesthewayinwhichpricesandothereconomicvaluesarerecorded.Asastoreofvalue,itoffersawaytotransferpurchasingpowerfromthepresenttothefuture.

∙Commoditymoney,suchasgold,ismoneythathasintrinsicvalue:

Itwouldbevaluedevenifitwerenotusedasmoney.Fiatmoney,suchaspaperdollars,ismoneywithoutintrinsicvalue:

Itwouldbeworthlessifitwerenotusedasmoney.

∙IntheU.S.economy,moneytakestheformofcurrencyandvarioustypesofbankdeposits,suchascheckingaccounts.

∙TheFederalReserve,thecentralbankoftheUnitedStates,isresponsibleforregulatingtheU.S.monetarysystem.TheFedchairmanisappointedbythepresidentandconfirmedbyCongresseveryfouryears.ThechairmanistheleadmemberoftheFederalOpenMarketCommittee,whichmeetsabouteverysixweekstoconsiderchangesinmonetarypolicy.

∙Bankdepositorsprovideresourcestobanksbydepositingtheirfundsintobankaccounts.Thesedepositsarepartofabank’sliabilities.Bankownersalsoprovideresources（calledbankcapital）forthebank.Becauseofleverage（theuseofborrowedfundsforinvestment）,asmallchangeinthevalueofabank’sassetscanleadtoalargechangeinthevalueofthebank’scapital.Toprotectdepositors,bankregulatorsrequirebankstoholdacertainminimumamountofcapital.

∙TheFedcontrolsthemoneysupplyprimarilythroughopen-marketoperations.Thepurchaseofgovernmentbondsincreasesthemoneysupply,andthesaleofgovernmentbondsdecreasesthemoneysupply.TheFedalsousesothertoolstocontrolthemoneysupply.Itcanexpandthemoneysupplybydecreasingthediscountrate,increasingitslendingtobanks,loweringreserverequirements,ordecreasingtheinterestrateonreserves.Itcancontractthemoneysupplybyincreasingthediscountrate,decreasingitslendingtobanks,raisingreserverequirementsorincreasingtheinterestrateonreserves.

∙Whenindividualsdepositmoneyinbanksandbanksloanoutsomeofthesedeposits,thequantityofmoneyintheeconomyincreases.Becausethebankingsysteminfluencesthemoneysupplyinthisway,theFed’scontrolofthemoneysupplyisimperfect.

∙TheFederalReservehasinrecentyearssetmonetarypolicybychoosingatargetforthefederalfundsrate,ashort-terminterestrateatwhichbanksmakeloanstooneanother.AstheFedachievesitstarget,itadjuststhemoneysupply.

CHAPTEROUTLINE:

Thisisagoodchapterto“winback”thestudentswhowereboredwithnationalincomeaccounting.StudentsaregenerallyinterestedinlearningmoreaboutthebankingsystemandtheFederalReserve.TheFederalReserveoffersafree,13-minutevideoentitled“TheFedToday”thatdiscussesthehistoryandoperationsoftheFed.

I.TheMeaningofMoney

Begintheanalysisbyaskingstudents,“Whatismoney?

”Studentswilllikelywanttostartrightinwithadiscussionofthefunctionsthatmoneyserves.Stopthem.Asktheminsteadtodescribemoney.Holdupadollarbillandapieceofpapercuttothesamesize.Askthestudentswhichtheywouldpreferandwhy.

A.Definitionofmoney:

thesetofassetsinaneconomythatpeopleregularlyusetobuygoodsandservicesfromotherpeople.

B.TheFunctionsofMoney

1.Moneyservesthreefunctionsinoureconomy.

a.Definitionofmediumofexchange:

anitemthatbuyersgivetosellerswhentheywanttopurchasegoodsandservices.

b.Definitionofunitofaccount:

theyardstickpeopleusetopostpricesandrecorddebts.

c.Definitionofstoreofvalue:

anitemthatpeoplecanusetotransferpurchasingpowerfromthepresenttothefuture.

2.Definitionofliquidity:

theeasewithwhichanassetcanbeconvertedintotheeconomy’smediumofexchange.

a.Moneyisthemostliquidassetavailable.

b.Otherassets（suchasstocks,bonds,andrealestate）varyintheirliquidity.

c.Whenpeopledecidehowtoallocatetheirwealth,theymustbalancetheliquidityofeachpossibleassetagainsttheasset’susefulnessasastoreofvalue.

C.TheKindsofMoney

1.Definitionofcommoditymoney:

moneythattakestheformofacommoditywithintrinsicvalue.

2.Definitionoffiatmoney:

moneywithoutintrinsicvaluethatisusedasmoneybecauseofgovernmentdecree.

3.IntheNews:

WhyGold?

a.Historically,societieshaveusedgold,ratherthanothercommodities,forcommoditymoney.

b.ThisarticlefromNPRMorningEditiondescribeswhygoldisthebestchoiceforcommoditymoney.

D.MoneyintheU.S.Economy

1.ThequantityofmoneycirculatingintheUnitedStatesissometimescalledthemoneystock.

2.Includedinthemeasureofthemoneysupplyarecurrency,demanddeposits,andothermonetaryassets.

a.Definitionofcurrency:

thepaperbillsandcoinsinthehandsofthepublic.

b.Definitionofdemanddeposits:

balancesinbankaccountsthatdepositorscanaccessondemandbywritingacheck.

Figure1

3.Figure1showsthemonetaryassetsincludedintwoimportantmeasuresofthemoneysupply,M1andM2.

Pointouttostudentsthatcurrencyonlymakesupabout30%ofthevalueofM1,withtheremaining70%intheformofcheckingdeposits.Studentsneedtounderstandthatthemajorityofthemoneyintheeconomyisactuallymadeupofaccountbalancesratherthanstacksofcurrencyinavault.

MakesurethatstudentsrealizethattheassetsincludedinM1andM2differintermsoftheirliquidity.Alsonotethatthereareothermeasuresofthemoneysupply（M3andMZM）,whichincludelessliquidassetslikelargetimedeposits.

4.FYI:

WhyCreditCardsAren’tMoney

a.Creditcardsarenotaformofmoney;whenapersonusesacreditcard,heorsheissimplydeferringpaymentfortheitem.

Studentsarequitecuriousaboutwhethercreditcardsareconsideredmoney.Youcansatisfytheircuriosityinpartbypointingoutthatcreditcardsactuallyleadtoadropinthequantityofmoneypeopleneedtocarrybecausetheyallowhouseholdstoconsolidatebillsforpaymentonceamonth.

b.Becauseusingadebitcardislikewritingacheck,theaccountbalancesthatliebehinddebitcardsareincludedinthemeasuresofmoney.

5.CaseStudy:

WhereIsAlltheCurrency?

a.IfwedividetheamountofoutstandingcurrencyintheUnitedStatesbytheadultpopulation,wefindthattheaverageadultshouldhaveapproximately$4,490incurrency.

b.Ofcourse,mostadultscarryamuchsmalleramount.

c.OneexplanationisthatagreatdealofU.S.currencymaybeheldinothercountries.

d.Anotherexplanationisthatlargeamountsofcurrencymaybeheldbycriminalsbecausetransactionsthatusecurrencyleavenopapertrail.

II.TheFederalReserveSystem

A.DefinitionofFederalReserve（Fed）:

thecentralbankoftheUnitedStates.

B.Definitionofcentralbank:

Aninstitutiondesignedtooverseethebankingsystemandregulatethequantityofmoneyintheeconomy.

Activity1—WhatCanBeLearnedfromaDollar?

Type:

In-classdemonstration

Topics:

Money,FederalReserve

Materialsneeded:

None

Time:

5minutes

Classlimitations:

Worksinanysizeclass

Purpose

ThisactivityintroducestheroleoftheFederalReserveincontrollingthemoneysupply.

Instructions

Asktheclasstotakeadollarbillfromwallets（ora$5,$10,$20,or$100）.Studentswithoutanycurrencycansharewithsomeonewhodoes.Asktheclasstoreadthebill.

Afteraminute,askthemwhattheyhavelearned.

CommonAnswersandPointsforDiscussion

Moststudentsfocusonthestatement“Thisnoteislegaltenderforalldebts,publicandprivate.”Thisstatementistheonly“backing”U.S.currencyhas—thenoteisnotconvertibleintogoldorsilver.Thiscanbeusedtointroducethedifferencebetweenfiatmoneyandcommoditymoney.

Someonewillusuallypointtothephraseprintedatthetopofthefaceofeachbill:

“FederalReserveNote.”ExplaintheFedfunctionsastheUnitedStates'centralbank—controllingthemoneysupplyandsupplyingcurrencytobanks.

InformationaboutthestructureoftheFederalReservecanbefoundinthesealtotheleftofWashington’sportrait.Thewritingaroundthesealsays“FederalReserveBankof___________.”

Iftheclassisbigenough,all12FederalReserveBankswillberepresented:

Boston,NewYork,Philadelphia,Richmond,Atlanta,Cleveland,Chicago,St.Louis,Minneapolis,KansasCity,Dallas,andSanFrancisco.

Thisisagood