Economics 1022A/B Chapter 24: Money, the Price Level and Inflation

• School: Western University
• Department: Economics
• Course: Economics 1022A/B
• Professor: Jeannie Gillmore

Document Summary

Money: any commodity or token that is generally acceptable as a means of payment. A means of payment: a method of settling a debt. When a payment has been made, there"s no remaining obligation between the parties to a transaction. Medium of exchange any object that"s generally accepted in exchange for goods and services. Without money, it would be necessary to exchange goods and services directly for other goods and services an exchange called barter. Barter needs a double coincidence of wants, but money overcomes this need. Unit of account an agreed measure of stating the prices of goods and services. In the absence of a standardized unit of account, keeping track of prices and comparing prices would be difficult. Store of value any commodity or token that can be held and exchanged later for goods and services. If money isn"t a store of value, it can"t serve as a means of payment.