UNIT 4 Econ
Which of the following applies to money when it serves as a store of value? I. Money is a store of value because it is an agreed measure for stating goods' prices II. The more stable money's value, the better it serves as a store of value. III. When money serves as a store of value, it requires a double coincidence of wants.
II. only
The minimum percentage of deposits that a bank must hold and cannot use for lending is known as the
required reserve ratio
Which of the following is a primary function of money?
to serve as a unit of account.
If required reserves are $150 and deposits are $1000, what is the required reserve ratio?
15 percent
A $25,000 price tag on new car is an example of money as
a unit of account
A highly liquid asset
can be converted into a means of payment easily without loss of value
Banks lend the excess reserves created when new deposits come in because they want to
earn a profit
The function of money are :
medium of exchange, unit of account, and store of value.
The fact that using money avoids the double coincidence of wants necessary in a barter economy illustrates which function of money
medium of exchange.
