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ECO 4223 - FAU - Money and Banking - Exam 1 With Questions And 100% SURE ANSWERS
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ECO 4223 - FAU - Money and Banking - Exam 1 With Questions And 100% SURE ANSWERS
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JACKLINEECO 4223 - FAU - Money and Banking - Exam 1 With Questions And 100% SURE
ANSWERS
Terms in this set (64)
What is money? anything that serves as a medium of exchange, a unit of account, and a store of value
What is a stock or a flow? Money
Wealth a stock of money, the total collection of pieces of property that serve a to store value
Income a flow contruct, flow of earning over time
medium of exchange
Functions of Money unit of account
store of value
Medium of Exchange eliminates the trouble of finding a double coincidence of needs
Medium of exchange promotes specialization
Medium of exchange must be easily standardized
ECO 4223 - FAU - Money and Banking - Exam 1
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Medium of exchange must be divisible
Medium of exchange must be easy to carry
Medium of exchange must not deteriorate quickly
Unit of Account is used to measure value in the economy
Unit of Account reduces transaction costs
Store of Value used to save purchasing power over time
Store of Value and other assets also serve this fuction
Store of Value money is the most liquid of all assets but loses value during inflation
Measuring Money is done by monetary aggregates
Measuring Money is in two forms, M1 and M2
the most liquid because it includes currency, travelers checks, demand deposits, and other
M1 is
checkable deposits
M1 consists of currency, travelers checks, demand deposits, and other checkable deposits
M1 and other assets that aren't as liquid like savings deposits CD's, money market accounts, and
M2 consists of
mutual fund shares
Bitcoin is electronic money created in 2009
Bitcoin is created by decentralized users through the computer to verify transactions
Bitcoin as a medium of exchange is a good medium and can be used for exchange of other items
not as good because goods and services would need to be priced in terms of the bitcoin
Bitcoin as a unit of account is
currency
Bitcoin as a store of value is less stable and volatile in inflation because the prices are driven by speculation
Time Value of Money is money available today is essentially worth more than money at some time in the future
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