The balance of payments improves A) when there is an exchange ...

[hbsimmons88]

The balance of payments improves
 
  A) when there is an exchange rate appreciation.
  B) when there is an exchange rate depreciation.
  C) when the interest rate rises.
  D) never.

Question 2

Suppose you have a collection of gold coins from the 19th century. Comment on their suitability to provide for you each of the three functions of money.
 
  What will be an ideal response?

[pami445]

Answer to Question 1

D

Answer to Question 2

The coins are an exceptional store of value. They would serve well as a medium of exchange, eagerly accepted by most people. They are a poor unit of account, since their value fluctuates a great deal relative to other goods. The face value of the coins is not a reliable indicator of their worth relative to other goods. This is because they are valued primarily as a store of value (and historical/artistic artifacts), rather than as a medium of exchange.