ECON 1020 Chapter Notes - Chapter 25: Legal Tender, Money Multiplier, Money Supply

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A means of payment, or medium of exchange. Barter- the direct exchange of goods and services for other goods and services- the alternative to money. Medium of exchange- (means of payment)- what sellers generally accept and buyers generally use to pay for goods and services. Store of value- an asset that can be used to transport purchasing. 1. 2. 2. power from one time period to another. Liquidity property of money- the property of money that makes it a good medium of exchange as well as a store of value: it is portable and readily accepted and thus easily exchanged for goods. Unit of account- a standard unit that provides a consistent way of quoting prices: commodity and fiat monies. Commodity monies- items used as money that also have intrinsic value in. Fiat money or token money- items designated as money that are intrinsically worthless. Legal tender- money that a government has required to be accepted in settlement of debts.

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