Macro: Financial Markets And Monetary Policy Flashcards
1
Q
What problems does money solve
A
Money solves the problems created by the barter system
2
Q
What are the four main functions of money
A
Medium of exchange
Unit of account
Deferred payment
Store of value
3
Q
What is liquidity
A
Liquidity refers to how quickly a financial asset can be used to buy a good or service
4
Q
What scale is money classified on
A
Money is classified on a scale of M0-M3
5
Q
What is narrow money made up of
A
Narrow money is made up of M0 and M1
6
Q
What is M0
A
M0 is physical cash
