ECON 1010 Chapter 24: Money, The Price Level and Inflation
13 Feb 2017
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Chapter 24 money, the price level and inflation. Money: is defined as any commodity or token that is generally acceptable as a means of payment. Means of payment: is a method of settling debt. Money serves three other functions: medium of exchange, unit of account, store of value. Medium of exchange : is any object that is generally accepted in exchange for goods and services. Barter: an exchange, goods and services must be exchanged directly for other goods and services. Double coincidence of wants: a situation that rarely occurs. For example, if you want a hamburger you might offer a cd in exchange for it. A medium of exchange overcomes the need for a double coincidence of wants. Is an agreed measure for stating the prices of goods and services. It is much simpler if all the prices are expressed in dollars and cents.
