Homework Money and Banking Chapter
Due Wednesday: Discussion Questions 1, 2 and 3
1. Why are checking account balances, but not credit cards, regarded as “money”?
Credit cards are a type of loan, which isn’t paid until later and a checking account is
paid with the money that is available now.
2. In what respects are modern forms of money superior to the colonial use of wampum
as money?
Modern money is portable and is accepted in exchange for goods and services.
3. How are an economy’s production possibilities affected when workers are paid in
goods rather than in cash?
If workers are paid in goods it would be difficult to measure how much labor that has
a person has done. Rather when getting paid with cash it’s an hourly wage that is easy
to measure. Paying workers in goods would be time-consuming and cause a shift in the
production possibilities curve.