Essay question 1

Proponents of cryptocurrencies argue that currencies like Bitcoin should replace central bank currencies. Cryptocurrencies are digital, private currencies, which are run on an autonomous and decentralized algorithm. Over the last years, these currencies have gained a lot in value, but they have also seen periods of losses. In max. 200 words, and referring to the concepts studied in class, elaborate on the following question: Do cryptocurrencies fulfil the basic functions of money?

Essay question 2

Assume that because of Covid - 19 related costs, restaurant visits become more expensive but food in supermarkets does not. In max. 200 words, and referring to the concepts studied in class, elaborate on the following questions: How do these price changes affect GDP deflator and CPI and which of the two will change more? Will the price changes have macroeconomic effects (i.e. affect some of the macroeconomic variables that we covered in class) ?