8:12 & 9 Bill 84% Economics Case Study Economics Case Studies Money and Monetary Policy Case Study #1- Read the scenario and answer the questions given the information below. You're 21 years old and you have $10,000 in the bank. Your best friend Tyler says that cryptocurrencies like Bitcoin, are the money of the future. Tyler bought $2,000 of Bitcoin last year and he has already doubled his money. He thinks that you should convert your life savings to Bitcoin. You research Bitcoin because you're worried about a bubble and you're not sure if cryptocurrency is money or a financial asset. In your research you came across this article. The line between money and financial assets is not always clear. In fact, money is a type of financial asset-one that is highly liquid (used to make payments) but that typically pays little or no interest. While the number of companies that accept payment in Bitcoin has been growing, these transactions still represent a tiny part of the economy. Because Bitcoin prices fluctuate dramatically while the market is open and from day to day, retailers must recalculate their Bitcoin price frequently, which is likely to confuse both buyers and sellers. Warren Buffett, one of the world's most successful investors, says Bitcoin is difficult to value because it's not a value-producing asset. Stocks represent ownership of real capital and often provide a stream of dividend income; Bitcoin provides neither real capital nor income." Copyright Jacob Clifford 2020. www.ACDCecon.com Annual license required. Do not use unless you have purchased a license Links Bitcoin- https://bit.ly/3iSbDGz Article Link- https://research.stlouisfed.org/publicatio ns/page1-econ/2018/03/01/bitcoin- money-or-financial-investment 1. How much is one Bitcoin * 1 point worth is US dollars today? 20,283.90USD 2. What is the difference * 1 point between money and a financial asset? Ownership of finances Assets and income O8:12 & 2 9 all 84% 3. What are the three functions * 1 point of money? A medium of exchange, A unit of account, 4. Tyler has never used a * 1 point Bitcoin to purchase something. Does this suggest that Bitcoin is money or a financial asset? Why? Your answer 5. Why is it difficult for most * 1 point businesses to accept Bitcoin as a form of payment? Your answer 6. Why doesn't Bitcoin, or other * 1 point cryptocurrencies, provide dividend income? Your answer O821206Em ENE '71\" 84%- 7. According to the article, * 1 point which is more risky, stocks or cryptocurrency? Why? Your answer 8. Tyler points out that this * 1 point article was written by someone who works for the US Federal Reserve. Why might the central bank disapprove of cryptocurrencies? Your answer 9. How would you know if * 1 point Bitcoin, or any financial asset, is experiencing a bubble? Your answer 10. Do you think you should * 1 point convert your $10,000 into B Bitcoin? Why or why not? \"I O <