Fixed Assets, or: Why a Loan in Yap Is Hard to Roll Over Applicable Concept: fun
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Fixed Assets, or: Why a Loan in Yap Is Hard to Roll Over Applicable Concept: functions of money larger stones where they are and make a mental accounting that the ownership has been transferred whale's tooth. They also can bu YAP, Micronesia--On this tiny South Pacific island, life is easy and the currency is hard.... [I]he rom large seashells, but these are currency is solid as a rock. In fact, small changes. it is rock. Limestone to be precise. things with yar, a currency made The worth of stone money doesn't depend on size. Instead, the pieces are valued by how hard it was to get them here. . . The people of Yap have been For nearly 2,000 years the Yapese have used large stone wheels to pay for major purchases, using stone money ever since a Yapese warrior named Anagumang There are some decided advan first brought the huge stones over such as land, canoes and permis from limestone caverns on neigh- tages to using massive stones for money. They are immune to black- market trading, for one thing, and they pose formidable obstacles to boring Palau, some 1,500 to 2,000 sion to marry. Yap is a U.S. trust territory, and the dollar is used in years ago. Inspired by the moon, he fashioned the stone into large ocery stores and gas stations But reliance on stone money.. continues circles, The rest is history Yapese lean the stone wheels Buying property with stones isagainst their houses or prop up ANALYZEHE ISSUE much easier than buying it witlh U.S. dollars," says John Chodad,Most of the stones are 2 1/2 to S who recently purchased a building lot with a 30-inch stone wheel. "We don't know the value of the rows of them in vilage "banks. feet in diameter, but some are as a hole in the center so it can be CE 1. Explain how Yap's large stones much as 12 feet across. Each has pass the three tests in the defin- ition of money. slipped onto the trunk of a fallen 13 riefly discuss rap's large stones in terms of other desir able properties of money Stone wheels don't make goodbetel-nut tree and carried. It takes 20 men to lift some wheels. pocket money, so for small trans- actions, Yapese use other forms of currency, such as beer. .. . By custom, the stones are worthless when broken. You never Besides stone wheels and beer,hear people on Yap musing about Source: Why a Loan in Yap Is Hard to Roli Over,” Wall Street Journal, Mar. 29. 1984, p. 1. Reprinted by permission. Art Pine, "Fixed Assets, Or: the Yapese sometimes spend gaw, consisting of necklaces of stone beads strung together around a wanting a piece of the rock. Rather than risk a broken stone-or back-Yapese tend to leave theExplanation / Answer
1). Yap's stones have been used to pay for buying land, canoes and permission to marry. Thus, this means that the stones are "a medium of exchange"
2). Store of Value - The Yapsee's trust the value and reliability of their stone's, as John Chadad states that the islanders don't really trust the value of US dollars, and adds that they feel that their own island's currency (stones) are more realiable.
3). Every stone has a different value, which is characterized by how hard it was to get it to a particular place, the more valuable the stone is. This is similar to different denomination of currency notes, higher the value of currency, the more goods it can buy.
The Yap's stones are so heavy that it cannot be easily sold. This is one of the properties that should be desirable in a currency today due to rampant incidences of robbery.
Secondly, the stones have been used since thousands of years, which means that it is a very stable currency. This is one property that lacks in modern currency today which often loose their value over the years.
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