AP Macro 22 and 23

the primary difference between M1 and M2 is that

M2 includes saving deposits and time deposits but M1 doesn't

a financial asset is

a claim that entitles the owner to future income from the seller

a car mechanic who wants a TV finding an owner of an electronics store who wants a car repaired is an example of....

a double coincidence

a share of stock is considered

a financial asset

which of the following qualify as an asset from the viewpoint of a household

a house

a loan is

a liability for the borrower and an asset for the lender

when you are using money to purchase a new MP3 player money is serving as.....

a medium of exchange

commodity backed money is

a medium of exchange with no intrinsic value

a financial intermediary that creates a diversified portfolio of stocks and then resells that portfolio to individual investors is known as

a mutual fund

a liability is

a redeeming that you pay income in the future

what is called "near-money"

a savings account

M2 includes

all of M1 Money markets Time deposit Saving deposit

an economy that lacks a medium of exchange is a

barter system

what is considered to be an IOU

bond

what asset is the MOST liquid

cash

from the standpoint of economic growth banks are important to

channel savings into investment

debit cards are

considered part of the money supply since they allow access to a part of the money supply

M1 includes:

currency checkable deposits travelers checks

physical capital is purchased through investment spending which in turn is mostly financed out of

domestic and foreign savings

money that the government has ordered can be accepted as money is

fiat money

the gov saves when it

has a budget surplus

what asset is the LEAST liquid

house

a difference between a closed and an open economy is that

in the latter, foreign savings complement domestic savings in financial investment spending

if the price of an asset is expected to rise in the future

it will be more in demand today

as an investor you may choose to purchase a bond or a share of stock. If you choose to purchase the bond, you are likely to receive a _____________ return in exchange for a _________ level of risk

lower, lower

when we use money to buy groceries money is playing the role of a.....

medium of exchange

financial assets

paper claims that provide the buyer of the claim future income from the seller of the claim

banks are financial intermediaries that

provide liquid assets to lenders and long term financing to borrowers

financial markets

provide liquidity

in a simple closed economy all investment spending must come from

saving

when you discover money in your coat that you placed there last winter you unexpectedly find that you were using money as a....

store of value

a budget surplus would exist when which of the following occurs?

taxes are heated than government spending

the term "liquid asset" means

that the asset is readily convertible to cash

transaction costs are

the expenses for negotiating and executing a deal

"tuition at state university this year is 8000" which function of money does this statement best illustrate

unit of account

when countries replace gold and silver coins with paper money exchangeable for certain amounts of precious metals, the monetary system evolved from

using commodity money to using commodity backed money

the value of all accumulated savings of a household is considered

wealth

is a 50$ bill liquid??

yes cash is the most liquid