ECON 3300: chapter 3 - what is money

Wealth

he total collection of pieces of property that serve to store value such as bonds, common stock, art, land, furniture, cars, and houses.

unit of account

it is used to measure value in the economy. We measure the value of goods and service in terms of money, just as we measure weight in terms of pounds or distance in terms of miles.

commodity money

money made up of precious metals or another valuable commodity

hyperinflation

the inflation rate is exceeds 50% per month

liquidity

the relative ease and speed with which an asset can be converted into a medium of exchange. Money is the most liquid asset of all because it is the medium of exchange: it does not have to be converted into anything else to make purchases.

transaction cost

the time spent trying to exchange goods or services.

store of vaule

a repository of purchasing power over time and used to save purchasing power from the time income is received until the time it is spent.