Module 23

Question 1

money

Answer 1

anything that is generally acceptable in the exchange for goods and services

Question 2

currency in circulation

Answer 2

actual cash held by the public

Question 3

checkable bank deposits

Answer 3

bank accounts on which people can write checks

Question 4

money supply

Answer 4

total value of financial assets in the econ that are considered money

Question 5

3 roles of money

Answer 5

1) medium of exchange
2) store of value
3) unit of account

Question 6

commodity money

Answer 6

a good used as a medium of exchange that has intrinsic value in other uses

Question 7

commodity-backed money

Answer 7

a medium of exchange with no intrinsic value whose ultimate value is guaranteed by a promise that it can be converted into valuable goods

Question 8

fiat money

Answer 8

a medium of exchange whose value derives entirely from its official status as a means of payment

Question 9

money aggregate

Answer 9

overall measure of the money supply

ex: M1, M2

Question 10

M1

Answer 10

money= only currency in circulation + travelers checks + checkable bank deposits

Question 11

M2

Answer 11

money = M1 + near moneys (savings accounts, CD’s, time deposits, money market funds)