Money & Banking CH.3
The M1 measure of money includes
traveler's checks
which of the following is included in both m1 and m2
currency
As a store of value, money
is a way of saving for future purchases
If there are four goods in a barter economy, then one needs to know ________ prices in order to exchange one good for another
6
A hyperinflation is
a period of extreme inflation generally greater than 50% per month
money is
anything that is generally accepted as payment for goods and services or in the repayment of debt
Compared to checks, paper currency and coins have the major drawbacks that they
are easily stolen
________ money could be used for some other purpose other than as a medium of exchange, for example, gold coins could be melted down and turned into gold jewelry
commodity
For a commodity to function effectively as money it must be
easily standardized, making it easy to ascertain its value
a fall in the level of prices
increases the value of money
All of the following are necessary criteria for a commodity to function as money except -it must deteriorate quickly. -it must be divisible. -it must be easy to carry. -it must be widely accepted
it must deteriorate quickly
money aggregates are
measures of the money supply reported by the federal reserve
Currency includes
paper money and coins
Although ________ currency is lighter than coins made of metals, a disadvantage arising from modern technology is the ease of ________.
paper;counterfeiting
because it is a unit of account, money
reduces the number of prices that need to be calculated.