Study Guide to Man, Economy, and State with Power and Market
Study Guide to Man, Economy, and State with Power and Market
Study Guide to Man, Economy, and State with Power and Market
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152 <strong>Study</strong> <strong>Guide</strong> <strong>to</strong> <strong>Man</strong>, <strong>Economy</strong>, <strong>and</strong> <strong>State</strong> <strong>with</strong> <strong>Power</strong> <strong>and</strong> <strong>Market</strong><br />
<strong>Study</strong> Questions<br />
1. Why does Rothbard say that the exchange<br />
dem<strong>and</strong> curves for money will tend <strong>to</strong> be perfectly<br />
inelastic? (p. 757)<br />
2. Why is each of the components of the <strong>to</strong>tal<br />
dem<strong>and</strong> curve for money downward sloping?<br />
(pp. 757–60)<br />
3. The <strong>to</strong>tal dem<strong>and</strong> for money is the summation<br />
of the (pre-income) exchange dem<strong>and</strong> <strong>and</strong> the<br />
(post-income) reservation dem<strong>and</strong> (pp. 756–61).<br />
Suppose a man sells a car for 10 ounces of gold,<br />
<strong>and</strong> then decides <strong>to</strong> hold this 10 ounces of money<br />
in his cash balance. Do his actions count as the<br />
dem<strong>and</strong> for 20 ounces of gold?<br />
4. Why does Rothbard depict the supply of money<br />
as a vertical line? (p. 763) As the PPM of money<br />
rises, wouldn’t that induce people <strong>to</strong> mine more<br />
gold, etc.? Is Rothbard saying that the supply of<br />
money, unlike other goods, isn’t upward sloping?<br />
5. Rothbard says that “the ‘price’ of money is precisely<br />
the variable on which the dem<strong>and</strong> schedule<br />
depends” (p. 765). Isn’t this true of all commodities?<br />
6. Is speculation in money simply a matter of “selffulfilling<br />
prophecies”? (pp. 769–71)
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