Q2:

a-Some say the only criterion to use in predicting what will serve as money in the future is the real resource cost of producing it, including the transaction costs of verifying its authenticity. According to this criterion, what do you think will be the money of the future? (5 marks)

b-How are the financial decisions faced by a single person living alone different from those faced by the head of a household with responsibility for several children of school age? Are the tradeoffs they have to make different, or will they evaluate the tradeoffs differently? (5 marks)

c-Give an example of how the problem of moral hazard might prevent you from getting financing for something you want to do. Can you think of a way of overcoming this problem? (3 marks)

d- Give an example of how the problem of adverse selection might prevent you from getting financing for something you want to do. Can you think of a way of overcoming this problem? (3 marks)

e-Give an example of how the principal-agent problem might prevent you from getting financing for something you want to do. Can you think of a way of overcoming this problem? (4 marks)