bain_y_howells__monetary_economics__policy_and_its_theoretical_basis

2. What comprises the wealth of: (a) households? (b) firms?
3. For a short time, in the early years of the British settlement of Australia
(the 1790s), rum was used as a currency. What advantages and disadvantages
does rum have as a commodity money?
4. What is the significance of the word ‘ready’ in the term ‘ready money’?
5. What limits currently exist on the amount of credit that can be obtained
by households? Is there any attempt by the monetary authorities to control
the amount of credit available?
6. The words ‘exogenous’ and ‘endogenous’ are used widely in economics
— not just referring to money. What precisely do they mean? Provide other
examples of their use.
7. Provide examples of transactions in our modern monetary economy that
take place through barter.
8. How would you explain the phrase ‘time is money’? In recent years,
‘time banks’ have been developed to try to help poor people and communities
to overcome some of the problems they face within the market economy.
Which constraints on people are time banks trying to ease? Try to find
some UK examples of time banks.
9. The text refers to the treatment of the market in economics as a theoretical
concept devoid of social and institutional features. Clearly there are
many differences among different types of market. But are these important
for economists? For example, the business of financial markets used to be
conducted face-to-face on the floors of organized exchanges but is now conducted
very largely by telephone and the internet. Is this change likely to
have had any economic significance? If so, why?
Further reading
THE MEANING OF MONEY 25
Discussions of the meaning of ‘money’ in economics are often limited to
definitions or standard roles of money. For more discursive treatment, you
are likely to need to consult older books such as Visser (1974) — but these
are not now easy to find. By far the most entertaining book on what money
is and how it developed is Galbraith (1975). The early story of money is