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ECON206 Chapter Notes - Chapter 3: Precious Metal, Hyperinflation, Eurodollar

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lemonbeetle804
27 Dec 2019
School
University of Waterloo
Department
Economics
Course
ECON206
Professor
Derek Stacey

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ECON206 Full Course Notes
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Document Summary

Money: anything that is generally accepted as payment for goods or services or in the repayments of debts. Currency: paper money (such as dollar bills) and coins. Wealth: all resources owned by an individual, including all assets. Income: the flow of earnings per unit of time. Functions of money: the three primary functions are: (1) (2) (3) Medium of exchange: anything that is u sed to pay for goods and services. Commodity functioning as money : for a commodity to function effectively as money, it has to meet several criteria: (1) (2) (3) (4) (5) It must be easily standardized, making it simple to ascertain its value. It must be divisible, so that it is easy to make change . Unit of account: anything used to measure value in an economy. Store of value: a repository of purchasing power over time. Liquidity: the relative ease and speed with which an asset can be converted into cash.

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Related Questions

1. To say money is socially defined means that:

A) the money supply includes all public and private securities purchased by society.

B) whatever performs the functions of money extremely well is considered to be money.

C) society, acting through Congress, specifies what shall be included in the money supply.

D) money has been defined in a Constitutional amendment.

 

2. Money functions as:

A) a medium of exchange.

B) a store of value.

C) a unit of account.

D) all of these.

 

3. If you are estimating your total expenses for school next semester, you are using money primarily as:

A) a store of value.

B) an economic investment.

C) a unit of account.

D) a medium of exchange.

 

4. If you place a part of your summer earnings in a savings account, you are using money primarily as a:

A) medium of exchange.

B) store of value.

C) standard of value.

D) unit of account.

 

5. If you write a check on a bank to purchase a used Honda Civic, you are using money primarily as:

A) a store of value.

B) a medium of exchange.

C) a unit of account.

D) an economic investment. 

 

6.  A $70 price tag on a sweater in a department store window is an example of money functioning as a:

A) standard of deferred payments.

B) medium of exchange.

C) unit of account. 

D) store of value.

 

7. Stock market price quotations best exemplify money serving as a:

A) index of satisfaction.

B) store of value.

C) medium of exchange.

D) unit of account. 

 

8.  Purchasing common stock by writing a check best exemplifies money serving as a:

A) medium of exchange. 
 
B) unit of account.
 
C) index of satisfaction.
 
D) store of value.

 

 

 

 

when money is used to quote the price of a​ product, it is functioning as a

a. unit of account

b. means of payment

c. store of value

d. medium of exchange. 

A country that has never had its own currency has formed a central bank and put you in charge of developing money. It needs to perform the necessary functions of any good currency efficiently (i.e., being a medium of exchange, a store of value, and a unit of account). Because your country is interested in trading with other members of the global economy, other nations must have faith in its fitness and the currency exchange markets must be willing to accept it. Though your answer needs to be correct in terms of economic theory (so be sure to read the assigned chapters), creativity and having fun with it is strongly encouraged.