1. Explain the difference between fiat money and commodity money

2. Interest rates were lower in the mid-1980s than they were in the late 1970s, yet many economists have commented that real interest rates were actually much higher in the mid-1980s than in the late 1970s. Does this make sense? Do you think that these economists are right?

3. Consider the overlapping generation model for the following questions:

a. For each individual, explain the stationary allocation equation based on our OLG lecture material.

b. Using the social planner allocation, provide a graph demonstrating the golden rule allocation. Explain why this allocation maximizes utility for this individual.

c. Explain the trade without money outcome. In other words, explain the Autarky outcome if individuals did not have access to money in the OLG model.