ECON103 Study Guide - Comprehensive Final Exam Guide - Inflation, Price Level, Interest Rate
21 Nov 2018
School
Department
Course
Professor
Document Summary
Currency - the paper bills and coins used to buy goods. Economists consider money to be any asset that people are generally willing to accept in exchange for goods. Medium of exchange - what people use to trade for goods/services. Unit of account - measure in which prices are quoted. Store of value - way to hold wealth. Standard of deferred payment - allows trade across time. In a barter economy , there is no commonly accepted medium of exchange. Commodity-backed money is money that can be exchanged for a commodity at a fixed. Until 1971, u. s dollars were fixed in value to specific quantities of silver and gold. Fiat money is money that has no value - it is merely a medium of exchange (paper. Households and firms must believe in the value of fiat money. Measure in which prices are quoted to compare the value of goods and services. The good must be acceptable to most people.
