Advantage of a Ledger-Based Payment System
In an economy where transactions are typically made by exchanging physical bushels of grain, a new service allows individuals to deposit their grain and then make payments to merchants by instructing the depository institution to update its records. What is the primary economic advantage of using this new service compared to continuing with direct physical exchange? Explain your reasoning.
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Introduction to Macroeconomics Course
Ch.6 The financial sector: Debt, money, and financial markets - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
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Analysis in Bloom's Taxonomy
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Mechanism of Electronic Payment via Bank Liability Transfer in the Marco-Julia Model
An individual in an economy without official currency deposits 100 bundles of wood at a central institution. They instruct the institution to allocate 70 bundles to a long-term 'storage' account and 30 bundles to a 'transaction' account. The transaction account can be used to make payments to merchants via a mobile application. If this individual uses the app to buy food worth 8 bundles of wood, what will be the new balances in their accounts?
Advantage of a Ledger-Based Payment System
Adoption of a New Payment System
In an economy where physical goods are used for trade, a producer deposits 100 units of their goods into a bank. They place 80 units in a long-term 'savings' account and 20 units in a 'current' account, which can be used for payments via a mobile app. What is the primary advantage of using the 'current' account for a small purchase, as described in this system?
In an economic system where a bank facilitates payments from accounts holding physical goods (like grain), a depositor must physically withdraw their goods from the bank each time they wish to make a purchase from a merchant who also uses the same bank.
Evaluating a Goods-Based Digital Payment System
In an economy that uses physical goods for exchange, a farmer deposits 100 units of grain at a bank. She directs the bank to place 30 units into a 'current account' for daily transactions and the remaining 70 units into a 'savings account' for long-term storage. The current account is linked to a mobile app for payments. If the farmer attempts to use the app to purchase supplies worth 35 units of grain, what is the most likely outcome of this transaction?
In an economic system where physical goods are deposited in a bank and managed through different accounts, match each action with the corresponding banking component or concept.
A producer in an economy without a central currency wants to use a local institution's payment services to buy supplies from a merchant. Both the producer and the merchant use this institution. Arrange the following actions into the correct chronological sequence for the producer to set up their account and complete the purchase.
Rationale for Account Segregation in a Goods-Based Banking System