Economist Michael Bryan reports that the people on the island of Palua used stone disks as currency. The number of stones in front of someone’s house denoted his/her wealth.
A. If a trader came to the island with identical stones to the existing ones, what would happen to the value of the stones? Why?
B. If the stones are not identical, do you think the trader would be able to trade with the native people? Why or why not?
C. An anthropologist described the stones as “a memory of contributions,” suggesting that the more stones a person has signifies a greater contribution to the community (or society). Do you think the same description applies to our money? Why or why not? If why not, what do you think describes “a memory of contributions” in our society?
Source: Copied & Paraphrased from Colander (2010), Macroeconomics, 8th Edition
NOTE: Write your initial response with separate paragraphs of no more than 5-7 complete, non-compound sentences for each question. Put each part in separate paragraphs. Subsequent responses must be no more than 10 complete, non-compound sentences. All sources must be cited. Information should not be copied directly from any source.