Money and Financial Markets ECO 4223 Exam 3; Questions and Answers 100% Solved
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Course
ECO4223
Institution
ECO4223
Money and Financial Markets ECO 4223 Exam
3; Questions and Answers 100% Solved
Lecture 13
monetary regime The __________________ regime refers to the institutions and mechanisms
that govern the supply of money and, hence, its purchasing power.
Bitcoin _________________ is an unbacked digita...
Money and Financial Markets ECO 4223 Exam 3; Questions and Answers 100% Solved Lecture 13 monetary regime The __________________ regime refers to the institutions and mechanisms that govern the supply of money and, hence, its purchasing power. Bitcoin _________________ is an unbacked digital currency that was launched in 2009 by the pseudonymous Satoshi Nakamoto. 100,000,000 satoshis (or sats) 1 bitcoin can be divided into ___________________________________________. blockchain technology When bitcoin was introduced, it offered a novel way to process transactions via its ____________________________________. not all dots connected Explain decentralized. all dots connected to a center point Explain centralized. all dots connected to each other Explain distributed. Proof of Work -Producing an appropriate hash is difficult. -Miners have random chance of producing appropriate hash, which is determined by the relative computing power they devote to system. Proof of Stake -Producing an appropriate hash is easy. -Miners have random chance of producing appropriate hash, which is determined by the relative share of tokens they hold. Transaction Request Key Components of the Bitcoin Protocol: Money and Financial Markets ECO 4223 Exam 3; Questions and Answers 100% Solved -Designates public address of recipient -Authorized with private key of sender Blockchain Key Components of the Bitcoin Protocol: -Proof of work -Consensus Difficulty Adjustment Key Components of the Bitcoin Protocol: - Ensures one block is added every 10 minutes on average - Occurs every 2016 blocks Blocked Reward Key Components of the Bitcoin Protocol: - Initially 50 BTC per block - Cut in half every 210,000 blocks the halving schedule. Block reward is given by ________________________________________. the difficulty adjustment. Block speed is given by _________________________________________. block reward and block speed Supply of bitcoin is determined by ______________________________________. Money and Financial Markets ECO 4223 Exam 3; Questions and Answers 100% Solved predetermined Supply of bitcoin is ___________________________. -Bitcoin is used for transactions -Bitcoin has no alternative uses -Bitcoin is costly to produce Modeling Bitcoin as Money: What are the 3 characteristics of the model economy? -Demand for money -Supply of money -Marginal cost of production Modeling Bitcoin as Money: Our model will consist of what 3 curves? 1. demand to hold bitcoin. 2. less, more 3. a rectangular hyperbola Modeling Bitcoin as Money: 1. The demand for money (DM) in this model economy is the ____________________________________________. 2. As before, people hold money to make transactions. As the purchasing power of money (PPM) increases, proportionately ________ money is required to make the same transactions and if it decreases proportionately ___________ money is required. 3. The demand for money is _________________________________________. 1. non -monetary use, just the total shock of bitcoin. 2. predetermined, unanticipated changes in money supply. 3. as if it were fixed. Modeling Bitcoin as Money: 1. Recall that bitcoin has no ______________________________. Hence, the supply of money (SM) is _______________________________________. 2. Since the supply of bitcoin is ________________________, there are no ________________________________________________.
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