ECON 209 Study Guide - Final Guide: Barter, Money Supply, Interbank
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9 Nov 2018
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Moneyi a medium of exchange return in goods and services if there is no money people haveto do barter doublecoincidenceofwants unnecessarywhenmoneyis used. Money must have a relatively stable value if pricelevel is stable purchasingpoweris also stable. 2 if pricelevel is highly variable purchasingpoweris also variable usefulness of money as astoreof value is undetermined nnrnrnr. Fmoney is used in accounting not rely on physical existence for this purpose h metallic money coin cupping thin slice metal. 2 paper money like thedepositors receipts ofgoldsmiths transfer receipts forpurchase_ transferringof paperreceipts inventionofpapermoney issuedby bank banknotes fictionally backed. Only central banksare allowed to issue currency convertible ondemand. Depositmoney money heldby the public in theformofdepositswith commercial banks. Today banks issuing morepromisesto deposit than they have cash reserves available to pay out u 2. Centralbank banker to commercial banks and government sole moneyissuing authority. Financiduemediae privateinstitutionserves thegeneral public commercial banks intermediary between lenderlaverandborrowed.
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Question 1. Which of the following is not included in M1?
a- currency
b- demand deposits
c- traveller's checks
d- credit cards
b- exactly $200. c- less than $200. d- None of the above are correct. |
b- M2 but not M1. c- M1 and M2. d- neither M1 nor M2. |
b- are a store of value. c- have led to wider use of currency. d- are part of the money supply. |
b- 20 percent. c- 80 per cent. d- 100 per cent. |
b- serves as a medium of exchange but not as a unit of account. c- is commodity money. d- has no intrinsic value. |
b- $125; one explanation for this relatively small average is that U.S. citizens hold a lot of foreign currency. c- $3,700; one explanation for this relatively large amount is that criminals probably prefer currency as a medium of exchange. d- $3,700; one explanation for this relatively large average is that U.S. citizens hold a lot of foreign currency. |
b- it is a medium of exchange. c- it is a unit of account. d- it has intrinsic value. |
b- government bonds are conducted at the New York Fed's trading desk. c- real estate and other real assets are conducted by the Federal Open Market Committee. d- All of the above are correct. |
b- inflation in the long run and employment and production in the long run. c- inflation in the short run and employment and production in the short run. d- inflation in the short run and employment and production in the long run. |