ECN 204 Lecture Notes - United States Treasury Security, Open Market Operation, Openmarket
30 Apr 2012
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Document Summary
Money: the set of assets in an economy that people regularly ise to buy goods and services from other people. Medium of exchange: an item buyers give to sellers when they want to purchase g&s. When you buy a shirt at a clothing store, the store gives you the shirt, and you give the store you money. You are confident that the store will accept you money since it"s a medium of exchange. Unit of account: the yardstick people use to post prices and record debts. A shirt may cost and a hamburger costs . It is accurate to say that the price of a shirt is 10 hamburgers and the price of a hamburger is. 1/10 of a shirt, but prices are never quoted like that. If you take a loan from a bank, the size of your future loan repayments will be measured in dollars, not in a quantity of goods and services.
