Macroeconomics 8th Edition by David Colander

Exercise 3

Economist Michael Bryan reports that on the island of Palau, the Yapese used stone disks as their currency. The number of stones in front of a person's house denoted how rich he or she was.
a. Would you expect these stones to be used for small transactions?
b. An Irish-American trader, David O'Keefe, was shipwrecked on the island, and thereafter returned to the island with a boatload of stones. If they were identical to the existing stones, what would that do to the value of the stones?
c. If O'Keefe's stones could be distinguished from the existing stones, how would that change your answer to b ?
d. An anthropologist described the stones as "a memory of contributions"-the more stones a person has, the more that person has contributed to the community. Could the same description be used to describe our money?