ECON 1010 Chapter Notes - Chapter 24: Cheque Clearing, Deposit Account, Credit Union

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goldmacaw224

24 Jul 2016

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Chapter 24 money, the price level, and inflation. Commodity or token that is generally accepted as a means of payment. A means of payment is a method of settling debt: payment made = no remaining obligation between the parties to a transaction. Money serves three other functions: medium of exchange: Any object that is generally accepted in exchange for goods and services. Without a medium of exchange, goods and services must be exchanged directly for other goods and services-barter. Barter requires a double coincidence of wants, a situation that rarely occurs. A medium of exchange overcomes the need for a double coincidence of wants. Money acts as a medium of exchange because people with something to sell will always accept money in exchange for it: unit of account: It"s an agreed measure for stating the prices of goods and services: store of value:

Related Questions

Which of the following is the best definition of money?

a. Gold.

b. An obligation between the parties to a transaction.

c. Any medium of exchange.

d. Any commodity or token that is generally accepted as a means of payment.

grayhyena396

A property right is

		A social arrangement that governs the ownership, use, and disposal of anything that people value.
		An economical unit that hires production factors and organizes those factors to produce and sell goods and services.
		Any arrangement that enables buyers and sellers to get information and to do business with each other.
		Any commodity or token that is generally accepted as a means of payment.
		A medium of exchange.

cyantermite905

1. The market in which loans are bought and sold is called the:

		loan market.
		money market.
		secondary loan market.
		primary loan market.

2. Which of the following is omitted in a barter transaction?

		trade
		medium of exchange
		store of value
		money

3. If Bill performs plumbing upgrades for Alice in exchange for her incorporating his business, then their _________________________ will be satisfied.

		balance of trade
		double coincidence of wants
		convenience of exchange
		division of labour

4. If loans become far less available, then sectors of the economy that ______________ like business investment, home construction, and car manufacturing can be dealt a crushing blow.

		depend on borrowed money
		typically generate extraordinary gains
		make loans to financial capital markets
		failed to diversify risk

5. Stealth bank has deposits of $600 million. It holds reserves of $30 million and government bonds worth $80 million. If the bank sells its loans at the market value of $400 million, what will its total assets equal?

		$110 million
		$710 million
		$480 million
		$510 million

6. Lance paid $175,000 for his house in 2003 and sold it for $325,000 in 2006. What function did the house serve during the time Lance owned it?

		medium of exchange
		unit of account
		store of value
		unit of exchange

7.Which of the following terms is considered to be a narrow definition of the money supply that includes, among other things, currency?

		savings
		money
		M2
		M1

8. Which of the following institutions determines the quantity of money in the economy as its most important task?

		U.S. Department of the Treasury
		Federal Open Market Committee
		Central Bank
		Federal Reserve Board of Governors

9. How are the specific interest rates for the lending and borrowing markets determined?

		U.S. Treasury Department Board policy
		by the forces of supply and demand
		through open market operations
		by altering the discount rate

10.When the central bank lowers the reserve requirement on deposits:

		the money supply increases and interest rates decrease.
		the money supply and interest rates decrease.
		the money supply and interest rates increase.
		the money supply decreases and interest rates increase.

taupeant891

ECON 1010 Chapter Notes - Chapter 24: Cheque Clearing, Deposit Account, Credit Union

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