1. What are the three basic functions of money? Describe how rapid inflation can undermine moneyâ€™s ability to perform each of the three functions. 2. What are demand shocks? Give an example of a positive and a negative demand shock. 3. What is the difference between a slowdown in economic growth and a recession? 4. What is the opportunity cost of unemployment for an economy? What social problems have been linked to higher rates of unemployment? 5. Why are savings and investment so important for economic growth? How do savings and investment affect present and future consumption? Explain.
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