Money Flashcards

1
Q

Functions of money

A
  • Medium of exchange
  • Store of value
  • Unit of account
  • Standard of deferred payment
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2
Q

Characteristics of money

A
  • Hard to counterfeit
  • Durable and portable
  • Acceptable when making transactions
  • Holds value over time
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3
Q

Narrow money

A

Refers to the notes and coins in circulation, plus balances held at the central bank.
- Very liquid

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4
Q

Liquidity

A

How easily an asset can be spent (converted to cash)

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5
Q

Broad money

A

Includes assets that are less liquid, as well as all the things that make up narrow money

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