ECN 204 Chapter 10: Chapter 10

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pearsquirrel474

22 Feb 2012

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Ecn 204: chapter 10 -- the monetary system. Money: the set of assets in an economy that people regularly use to buy goods an d services from other people. Money has 3 functions in the economy: medium of exchange, unit of account, stor e of value. Medium of exchange: and item that buyers give to sellers when they want to purch ase goods or services. Unit of account: the yardstick people use to post prices and record debts. Store of value: an item that people can use to transfer purchasing power from th e present to future. Liquidity: the ease with which an asset can be converted into the economy"s medi um of exchange. Money is the most liquid asset;but it is not a good store of value. When prices rise; value of money falls (the relationship betwee n price level and value of money)

Related Questions

If an economy used gold as money, its money would be

a.commodity money, but not fiat money.

b.fiat money, but not commodity money.

c.both fiat and commodity money.

d.functioning as a store of value and as a unit of account, but not as a medium of exchange

harlequinpug73

1. To say money is socially defined means that:

A) the money supply includes all public and private securities purchased by society.

B) whatever performs the functions of money extremely well is considered to be money.

C) society, acting through Congress, specifies what shall be included in the money supply.

D) money has been defined in a Constitutional amendment.

2. Money functions as:

A) a medium of exchange.

B) a store of value.

C) a unit of account.

D) all of these.

3. If you are estimating your total expenses for school next semester, you are using money primarily as:

A) a store of value.

B) an economic investment.

C) a unit of account.

D) a medium of exchange.

4. If you place a part of your summer earnings in a savings account, you are using money primarily as a:

A) medium of exchange.

B) store of value.

C) standard of value.

D) unit of account.

5. If you write a check on a bank to purchase a used Honda Civic, you are using money primarily as:

A) a store of value.

B) a medium of exchange.

C) a unit of account.

D) an economic investment.

6. A $70 price tag on a sweater in a department store window is an example of money functioning as a:

A) standard of deferred payments.

B) medium of exchange.

C) unit of account.

D) store of value.

7. Stock market price quotations best exemplify money serving as a:

A) index of satisfaction.

B) store of value.

C) medium of exchange.

D) unit of account.

8. Purchasing common stock by writing a check best exemplifies money serving as a:

A) medium of exchange.

B) unit of account.

C) index of satisfaction.

D) store of value.

crimsonalligator541

The buyers and sellers in the country of perylia use corn as a medium of exchange. This means that:

A. corn can be used as a store of value but not as a unit of account in Perylia
B. Perylia uses Fiat money
C. corn cannot be used as a store of value or as a unit of account in Perylia
D. Perylia uses commodity money.

viridiandog782

ECN 204 Chapter 10: Chapter 10

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