Response Prompt:
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!”
Answer each question below in as few or many words as you need: (target around 150 words total across both questions)
- 1: Let’s make sure we have a grasp on a few key terms. First, in your own words define: fiat money, fractional reserve banking, and blockchain technology
- 2: Which of the three economists positions would you side with and why? (or write in your own answer as “Economist D” if you propose an alternative to these three). Defend your position.