ECON350 Lecture Notes - Lecture 2: Bitcoin, Barter, Commodity Money

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ochremoose930

3 Aug 2018

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Contents of the week: money: what it is in modern context, what it does, the seven stages of monetary and financial development. The functions of money: medium of exchange. Trade what u have for what u want. Transaction happen the same time , same place: unit of account. Facilitates valuation and calculation u need to know how much: store of value. Allows economic transactions to be conducted over long periods, and allows people to store their wealth in the form of money. Bitcoin is a medium of exchange, but limited good can only be purchased. Buy and sell using bitcoin, the account will be credit and debit. Store of value: the price of bitcoin is highly fluctuated! If something functions as a means of payment, it would be used as a store of value, and vice versa. If ppl value it, ppl will store it, and can be use as medium of exchange.

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.

crimsonalligator541

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

Let A be a builder, B a shoemaker, C a house, D a shoe. The builder, then, must get from the shoemaker the latter's work, and must himself give him in return his own. If then, first there is proportionate equality of goods, and then reciprocal action takes place, the result we mention will be effected. If not, the bargain is not equal, and does not hold; for there is nothing to prevent the work of the one being better than that of the other; they must therefore be equated. (And this is true of the other arts also; for they would have been destroyed in what the patient suffered had not been just what the agent did, and of the same amount and kind.) For it is not two doctors that associate for exchange, but a doctor and a farmer, or in general people who are different and unequal; but these must be equated. This is why all things that are exchanged must be somehow comparable. It is for this end that money has been introduced, and it becomes in a sense an intermediate; for it measures all things, and therefore the excess and the defect-how many shoes are equal to a house or to a given amount of food. The number of shoes exchanged for a house (or for a given amount of food) must therefore correspond to the ratio of builder to the shoemaker. For if this is not so, there will be no exchange and no intercourse. And this proportion will not be affected unless the goods are somehow equal. All goods must therefore be measured by some one thing, as we said before. (Aristotle Nicomachean Ethics Book V. What two functions of money is Aristotle describing in this passage? [Select two answers]. Unit of Account, Store of Value, Medium of Exchange, Liquidity. Initially, 20,000 pairs of shoes can buy one house. Additionally, the price of one pair of shoes $50. What is the price of one house? $500,000, $1,000,000, $10,000,000, $5,000,000. Suppose the central bank increases the money supply. After the action by the central bank, the price of a pair of shoes is now $75. What is the price of one house? $1,500,000, $3,000,000, $15,000,000, Not enough information. Based on your answers above, what is the theory that explains the relationship between the price of a pair of shoes and the price of a house?

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ECON350 Lecture Notes - Lecture 2: Bitcoin, Barter, Commodity Money

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