'Good' money assets: Gold, Dirt, Corn, Oil
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Would each of the following assets be "good" money? Why or why not?
A. Gold
B. Dirt
C. Corn
D. Oil (Often called liquid gold)
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Solution Summary
The solution explains the ordering of the four assets in terms of being 'good' money. Also included is a short article on point.
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Would each of the following assets be "good" money? Why or why not?
A. Gold B. Dirt C. Corn D. Oil (Often called liquid gold)
'Good' money assets imply assets which have the capacity to grow and produce returns; in other words, investments. The article copied below presented a short discussion about the difference in assets. It compares good assets to bad assets with examples. It's a clear and quick summary of the issue.
In your problem, the good assets which can grow to wealth are dirt, oil, gold and corn, in that order. Dirt is the slang word for land (as used by developers) and it has the most capacity to turn to healthy amounts of cash. Bare land is fairly inexpensive to hold and they simply aren't making any more of it.
Oil is a commodity in great demand on a world wide scale. Although the price is volatile, the demand for it will continue to support a good price. In the current market, some might argue that gold has more ...
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