Three economists walk into a bar and have the following argument:
- Economist A : “We need to return to the gold standard and limit our money supply to match gold reserves, this will guard against inflation!”
- Economist B: “We should keep fiat currency and fractional reserve banking as is, this will help our economy grow!”
- Economist C: “We should abandon government-based currencies all together for decentralized crypto-currencies, this will democratize money!”
Response Prompt
Answer each question below in many words as you need. No outside sources or quotes or citations. Stick to the prompt above and answer each question below.
- 1: Let’s make sure we have a grasp on a few key terms. First, in your own words define: fractional reserve banking, fiat money, and block chain
- 2: Which expert is right when the entire concept of money is socially constructed? Each choice will have a set of social repercussions, both pro and con. Which one would you side with and why? (or write in your own answer as “Economist D” if you propose an alternative to these three)
- 3: What do you think the role of crypto-currency will be in 10 years? What impact will it have on fiat money? Why?