ECON 1100 Chapter Notes - Chapter 10: Fiat Money, Commodity Money, Pras

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Chapter 10 - money, banks, & the bank of canada. Money - assets that people are generally willing to accept in exchange for goods and services or for payment of debts. Barter economy - economy where goods and services are traded directly for other goods and services. Commodity money - a good used as money that also has value independent of its use as money. Money serves as a medium of exchange when sellers are willing to accept it in exchange for goods and services. An economy is more efficient when a single good is recognized as a medium of exchange. A way of measuring the value in the economy in terms of money (price). Money allows value to be stored easily (and be used later). Liquidity is the ease of which an asset can be converted into the medium of exchange.

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