1. What effect would a period of rapid inflation likely have on the role of money as a store of value, and on people's attitudes toward money generally? Why?
2. in 1973-75, real interest rates were actually negative.
(a) what would a negative real interest rate mean?
(b) what could explain such an unusual development?
1 We can see many examples from history (Argentine, Ukraine, Weimar Germany, etc.). People consider money as useless as a store of value. So, they spend their earnings as soon as they receive it, preferably buying things that will maintain their value or become more valuable like ...
We can see many examples from history (Argentine, Ukraine, Weimar Germany, etc.). ......