ECON 3430 Chapter Notes - Chapter 2: Money Market, Money Supply, Payments Canada

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olivewombat117

16 Feb 2017

School

York University

Department

Economics

Course

ECON 3430

Professor

Brenda Spotton- Visano

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ECON 3430 Full Course Notes

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Money is an asset that is generally accepted as payment for goods and services or repayment of debt. Income, in contrast, is a flow of earnings over time. Wealth is the value of assets minus liabilities. Money has three functions: means of payment, unit of account, store of value. The first of these functions is the most important - anything that is used as a means of payment must be a store of value and thus is very likely to become a unit of account. The primary use of money is as a means of payment. Barter, in which a good or service is exchanged directly for another good or service requires a double coincidence of wants; this makes the economy run less smoothly. Money finalizes payments so that buyers and sellers have no further claim on each other that is (cid:373)o(cid:374)e(cid:455)"s spe(cid:272)ial role.

Related Questions

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

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

Money is often used to purchase items in society, but bartering was common in the past. Bartering is the trading of one good or service for another good or service.

Explain your experiences with bartering. List at least 1 advantage and 1 disadvantage to bartering.

Most developed countries in the world use flat money. This means that their money is not backed by gold or silver. The value is related to only the faith in the country that backs it. The US has used flat money since the 1970s.

Why do you think most developed countries use flat money? Would it be practical to switch back to a commodity (like gold or silver) backed money system? Why or why not?

Use at least two of the following terms in your answer: Asset

Flat Money

Store of value

Unit of account

Medium of exchange

lavenderkoala678

ECON 3430 Chapter Notes - Chapter 2: Money Market, Money Supply, Payments Canada

ECON 3430 Full Course Notes

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