ch 2

Question 1

Used of money : (3)

Answer 1

payment, unit of account and store of value

Question 2

barter is the “double _____”

Answer 2

coincidence of wants

Question 3

Market liquidity

Answer 3

ability to sell assets for money

Question 4

funding liquidity

Answer 4

ability to borrow money to buy securities and loans

Question 5

payment system is the

Answer 5

web of arrangements that allow exchange of goods and services

Question 6

fiat money is

Answer 6

govt decree

Question 7

Money is the unit of account that we use

Answer 7

to quote prices and record debts

Question 8

Policy lacks _______ whenever policymakers have a strong incentive to give up in the future on their current promises or plans.

Answer 8

time consistency

Question 9

Functions of money summary

Answer 9

When money serves as a good means of payment, it will also be a good unit of account and is likely to be a good store of value.

Question 10

An automated clearinghouse transaction (ACH) is an example of which of the following types of electronic payments?

Answer 10

electronic fund transfer