Evolution, characteristics and functions of money Flashcards
1
Q
What constitutes ‘money’?
A
Something that is:
- Unit of account
- Store of value
- Medium of exchange
2
Q
What was the main aim of money?
A
To remove the shortcomings of the barter system
3
Q
What are the functions of money?
A
- Medium of exchange
- Means of storing wealth
- Means of establishing value of future claims and payments
4
Q
What is fiat money?
A
Objects that are money because the law decrees them to be money
5
Q
What are examples of fiat money?
A
Currency and deposits at banks
6
Q
What is near money
A
Money that fulfils some of the functions of money, but can’t be classed as money
7
Q
What are some examples of near money?
A
- Credit cards
- Luncheon vouchers
- Government securities
8
Q
What are some “liquid” assets
A
- Cash
- Time deposits
- Treasury bills
- Certificates of deposit
9
Q
What are types of money in the uk?
A
- Notes and coin
- M3
- Retail M4
- M4
10
Q
What are some electronic money examples?
A
- Electronic purse
- Internet money
- Mobile money
