QUESTION 1
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Financial relief for individuals and businesses through the covid-19 pandemic has greatly increased the public debt in Canada as well as in many other countries. What does the Rogoff reading “Not a pretty picture” tell us is likely to happen as a result?
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QUESTION 2
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Central bankers claim that maintaining a moderate level of inflation is justified to avoid the dangers and downsides of deflation. The Economist reading called “Of debt, deflation and denial; The deflation danger”, discusses whether deflation is really a danger that we should worry about. Summarize the main arguments presented in the reading.
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QUESTION 3
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With reference to the Module 13 reading “A cash call – The future of money”, explain what a “stored-value” payment system and how it works on at least 2 different platforms. If we were to implement a widely accepted stored value payment system in Canada, what would be the best platform to choose and why? Justify your answer with clear arguments and examples.
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QUESTION 4
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The Gjerstad and Smith reading “From Bubble to Depression” talks about the house price bubble in the U.S. that led to the financial crisis of 2008-9. How do they identify a house price “bubble”? Does that mean there is a house price bubble in Canada in the past few years? Provide at least two clear arguments on each side of the case.
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QUESTION 5
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The Economist reading called “A short history of modern finance” summarizes the main elements of the rapid period of financial market changes following the abandonment of Bretton-Woods by US President Nixon in late 1971. Identify and briefly explain the importance of 4 of the main financial innovations since the early 1970s that have had a clear impact on individual investors.
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QUESTION 6
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With reference to the Selzer and Torres reading “A historic look at greed an fear in market phenomena”, is bitcoin a bubble an how would you tell? Make sure to provide convincing arguments both for and against. Remember: if you say it is aa bubble, you must think you are smarter than Elon Musk since Tesla bought $1.5 billion in bitcoin in February 2021.
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QUESTION 7
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With reference to the Economist reading “Not-so-divine intervention”, explain what “sterilized intervention in the foreign exchange market” is an what it is supposed to accomplish.
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