An Advantage of Commodity Money Is That Prices Automatically Adjust

question 62

Essay

An advantage of commodity money is that prices automatically adjust with the supply of money. If this is true, why would economists also say the supply of money should be inelastic?

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Definitions:

Values

Core beliefs or principles that guide behavior and decision-making within an individual or organization.

Assumptions

Beliefs or ideas taken for granted without verification.

Social Identity Theory

A psychological framework that explains how individuals define themselves and others based on group memberships, leading to in-group favoritism and out-group discrimination.

Self-Concept

An individual's perception of themselves, including awareness of their characteristics and abilities.