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MONEY AND FINANCIAL MARKETS ECO 4223 EXAM 3 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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MONEY AND FINANCIAL MARKETS ECO 4223 EXAM 3 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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MONEY AND FINANCIAL MARKETSECO 4223 EXAM 3 QUESTIONS AND
ANSWERS WITH SOLUTIONS 2024
- ANSWER Lecture 13
monetary regime - ANSWER The __________________ regime refers to the institutions and mechanisms
that govern the supply of money and, hence, its purchasing power.
Bitcoin - ANSWER _________________ is an unbacked digital currency that was launched in 2009 by the
pseudonymous Satoshi Nakamoto.
100,000,000 satoshis (or sats) - ANSWER 1 bitcoin can be divided into
___________________________________________.
blockchain technology - ANSWER When bitcoin was introduced, it offered a novel way to process
transactions via its ____________________________________.
not all dots connected - ANSWER Explain decentralized.
all dots connected to a center point - ANSWER Explain centralized.
all dots connected to each other - ANSWER Explain distributed.
Proof of Work - ANSWER -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 - ANSWER -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 - ANSWER Key Components of the Bitcoin Protocol:
-Designates public address of recipient
-Authorized with private key of sender
Blockchain - ANSWER Key Components of the Bitcoin Protocol:
-Proof of work
-Consensus
Difficulty Adjustment - ANSWER Key Components of the Bitcoin Protocol:
- Ensures one block is added every 10 minutes on average
- Occurs every 2016 blocks
Blocked Reward - ANSWER Key Components of the Bitcoin Protocol:
- Initially 50 BTC per block
- Cut in half every 210,000 blocks
the halving schedule. - ANSWER Block reward is given by
________________________________________.
the difficulty adjustment. - ANSWER Block speed is given by
_________________________________________.
block reward and block speed - ANSWER Supply of bitcoin is determined by
______________________________________.
, predetermined - ANSWER Supply of bitcoin is ___________________________.
-Bitcoin is used for transactions
-Bitcoin has no alternative uses
-Bitcoin is costly to produce - ANSWER Modeling Bitcoin as Money:
What are the 3 characteristics of the model economy?
-Demand for money
-Supply of money
-Marginal cost of production - ANSWER Modeling Bitcoin as Money:
Our model will consist of what 3 curves?
1. demand to hold bitcoin.
2. less, more
3. a rectangular hyperbola - ANSWER 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. - ANSWER 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
________________________________________________.
3. We can treat the supply of money ____________________________.
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