XII. Tasks for thought

1. Identify each of the following items as legal, token, commodity, or IOU money or, indeed, as not-money:

a) gold

b) 1 pound coin

c) cigarettes

d) cheque for 100$

e) petrol.

f) camera accepted in part-exchange

g) a building society deposit

h) pigs, turkeys, and cocoa nuts

2. Eight individuals in a baiter economy have and want the following goods: Alice has some haddock (пикша) but would like some apples; Barry has some gin but fancies blackcurrant jam; Carol is in possession of doughnuts (пончики) but wants coconuts; Daniel has obtained some jellied eels but really wants doughnuts; Eva has some figs but would prefer jellied eels; Gloria has coconuts but yearns for gin; Henry has apples but would like haddock. Can you work out a series of transactions which would satisfy all concerned?

3. Which of the following characteristics are necessary for an asset to function as money?

a) backed by a precious metal;

b) Authorized as legal tender by the monetary authorities

c) Generally acceptable as a medium of exchange;

d) Having value in future transactions.

4. Which of the following would be regarded as an asset to a customer of a commercial bank?

a) A current account bank deposit;

b) A special deposit;

c) trade bills held by the bank as reserve assets;

d) The bank's deposits at the Bank of England;

e) an overdraft;

f) Loans advanced by the commercial bank in US$.

5. Assess the liquidity and likely return of each of the following financial assets:

a) cash

b) equities

c) bonds

d) bills

e) industrial shares