Can money be valuable in an infinite economy

Reference no: EM131209285

Consider an economy in which there is one consumer born at the start of each time period. Each consumer lives for two periods and receives an endowment of 1 unit of the consumption good when young. At the start of the economy there is a consumer who is already old. This consumer owns one unit of money but has no endowment of the consumption good. Money has no intrinsic value.

a. Can money be valuable in a finite economy (one that has a known end point)?

b. Can money be valuable in an infinite economy?

c. Can money allow exigency to be attained?

Reference no: EM131209285

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