There were several billion Canadian pennies in circulation before the government scrapped the penny in its 2012 budget. Suppose that instead of scrapping the penny, the government followed the proposal of Francois Velde, an economist at the Federal Reserve Bank of Chicago, and made the penny worth 5 cents. SOURCE: Francois Velde, "What's a Penny (or a Nickel) Really Worth?," Federal Reserve Bank of Chicago, Chicago Fed Letter, No. 235a, February 2007. The effect of this proposal would cause an increase in the value of M1+. Is this change likely to have much impact on the economy? O Yes O No
There were several billion Canadian pennies in circulation before the government scrapped the penny in its 2012 budget. Suppose that instead of scrapping the penny, the government followed the proposal of Francois Velde, an economist at the Federal Reserve Bank of Chicago, and made the penny worth 5 cents. SOURCE: Francois Velde, "What's a Penny (or a Nickel) Really Worth?," Federal Reserve Bank of Chicago, Chicago Fed Letter, No. 235a, February 2007. The effect of this proposal would cause an increase in the value of M1+. Is this change likely to have much impact on the economy? O Yes O No
Chapter15: Money Creation
Section: Chapter Questions
Problem 10SQP
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