Money Flashcards
1
Q
Functions of money
A
- Medium of exchange
- Store of value
- Unit of account
- Standard of deferred payment
2
Q
Characteristics of money
A
- Hard to counterfeit
- Durable and portable
- Acceptable when making transactions
- Holds value over time
3
Q
Narrow money
A
Refers to the notes and coins in circulation, plus balances held at the central bank.
- Very liquid
4
Q
Liquidity
A
How easily an asset can be spent (converted to cash)
5
Q
Broad money
A
Includes assets that are less liquid, as well as all the things that make up narrow money