monetary policies

Question 1

what is monetary policy

Answer 1

the actions taken by the government (or the central bank) to manipulate interest rates, the supply of money or credit, and the exchange rate to achieve its macroeconomic objectives

Question 2

what are the 4 functions of money

Answer 2

the medium of exchange
the store of value
the unit of account
a standard of deferrd payment

Question 3

Explain medium of exchange

Answer 3

Money can be accepted by both parties , therefore we don’t have to trade goods

Question 4

Explain store of value

Answer 4

Money won’t lose its value ( - inflation )

Question 5

Explain unit of account measure

Answer 5

Measure of value , different prices = different in some way

Question 6

Explain standard of deferred payment

Answer 6

People that don’t have money can borrow and it and pay it back