Econ Chapter 14 Notes Flashcards
1
Q
What are the three functions of money?
A
- Medium of Exchange
- Measure of Value
- Store of Value
2
Q
Medium of Exchange?
A
No need for barter
3
Q
Double or Mutual Coincidence of Wants?
A
- Each party has to want what the other has for a barter economy to work
- Very difficult to achieve
4
Q
Measure of Value?
A
Used to gauge worth of goods and services
5
Q
Store of Value?
A
Consumer can save money to use later
6
Q
Types of Money?
A
- Commodity
- Representative
7
Q
Commodity Money?
A
Money used for something besides money
8
Q
Representative Money?
A
Has little value except what authority gives it
9
Q
Characteristics of Money?
A
- Durable
- Portable
- Divisible
- Stable
- Limited
- Acceptable
10
Q
Functions of The Federal Reserve System
A
- Check-clearing
- Supervises Banks
- Protects Consumers
- Supplies Paper Currency
- Monetary Policy (Regulates Money Supply)
