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Please answer 15-1 and 15-3 OLLITIO 15-1. Until 1946, residents of the island of Yap used large doughnut-shaped stones as financial assets. Although prices of

Please answer 15-1 and 15-3

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OLLITIO 15-1. Until 1946, residents of the island of Yap used large doughnut-shaped stones as financial assets. Although prices of goods and services were not quoted in terms of the stones, the stones were often used in exchange for particularly large purchases, such as livestock. To make the transaction, several individu- als would insert a large stick through a stone's center and carry it to its new owner. A stone was difficult for any one person to steal, so an owner typically would lean it against the side of his or her home as a sign to others of accumulated purchasing power that would hold value for later use in exchange. Loans would often be repaid using the stones. Which of the functions of money did the stones perform? 15-2. During the late 1970s, prices quoted in terms of the Israeli currency, the shekel, rose so fast that grocery stores listed their prices in terms of the U.S. dollar and provided customers with dollar-shekel conver- sion tables that they updated daily. Although people continued to buy goods and services and make loans using shekels, many Israeli citizens converted shek- els to dollars to avoid a reduction in their wealth due to inflation. In what way did the U.S. dollar function as money in Israel during this period? 15-3. During the 1945-1946 Hungarian hyperinflation, when the rate of inflation reached 41.9 quadrillion percent per month, the Hungarian government discovered that the real value of its tax receipts was falling dramatically, To keep real tax revenues more stable, it created a good called a "tax pengo." in which all bank deposits were denominated for purposes of taxation, Nevertheless, payments for

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