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Questions answers what effect might a rise in stock prices have on your decisions to spend? Higher stock prices means that consumers’ wealth is higher and so they will be more likely to increase their spending. how does an increase in the value of the pound affect American businesses? It makes British goods more expensive relative to American goods. Thus American businesses will find it easier to sell their goods in the United States and abroad and the demand for their products will rise. how does a rise in dollar value affect US jeans manufactures? When the dollar increases in value, foreign goods become less expensive relative to American goods; thus you are more likely to buy French?made jeans than American?made jeans. The resulting drop in demand for American?made jeans because of the strong dollar hurts American jeans manufacturers. On the other hand, the American company that imports jeans into the United States now finds that the demand for its product has risen, so it is better off when the dollar is strong. why did cavemen not need money? Cavemen did not need money. In their primitive economy, they did not specialize in producing one type of good and they had little need to trade with other cavemen. why was gold a more likely candidate for use as money than wine was?  Wine is more difficult to transport than gold and is also more perishable. Gold is thus a better store of value than wine and also leads to lower transactions cost. It is therefore a better candidate for use as money. would you be willing to give up your checkbooks and use an electric means of payments? Why or why not. Not necessarily. Checks have the advantage in that they provide you with receipts, are easier to keep track of, and may make it harder for someone to steal money out of your account. These advantages of checks may explain why the movement toward a checkless society has been very gradual. rank the following assets from the most liquid to least liquid: a, checking account