Case Study 14.1 & 14.2

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Case Study 14.1: Mackerel Economics in Federal Prisons Case study 14.1 poses the question how well do pouches of mackerel satisfy the six properties of ideal money, which include “durable, portable, divisible, uniform quality, low opportunity cost, and stable value.” (McEachern, 2012). We have to take in consideration that this form of commodity money was implemented after federal prisons banned cigarettes in 2004. Mackerel has replaced cigarettes and has satisfied all six properties of ideal money quite well. The pouches are durable, it is safe to assume that they rarely have the opportunity to expire because they serve as commodity money in federal prison among the inmates. The pouches are durable as well. Out of the six properties of ideal money I would think that low opportunity cost is the only dilemma. Since the mackerel is a “hot commodity” now among inmates in federal prisons the odds of it being bartered at a minimum is hard to believe. Prisoners are using the pouches of mackerel to buy other goods and services within the prison such as “prison hooch, shoe shines, cell cleaning, even paying off gambling debts.” (Scheck, 2014). Case Study 14.2: The Hassle of Small Change Case study 14.2 asks in countries where the monetary system has broken down, what are some alternatives to which people have resorted to carry out exchange. There are several alternatives to money in countries where the monetary system has been broken down. Gold for example has been the alternative for money for many years. Gold follows the guidelines of the six properties of ideal money which was discussed in case study 14.1. Another alternative in which people have resorted to carry out exchange would be the innovative electronic Bit coin. “Bitcoin is an innovative payment network and a new kind of money” according to its website. (www.bitcoin.org, 2014). This

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