Money Flashcards
1
Q
What are four functions of money?
A
- Medium of exchange
- Store of value
- Unit of account
- Standard of deferred payment
2
Q
What are seven characteristics of money?
A
- Portability
- Durability
- Recognisablilty
- Scarce
- Divisible
- Acceptable
- Legal tender
3
Q
Define liquidity
A
How easily an asset can be exchanged for cash
4
Q
Define commodity money
A
Currency that has a value for something other than money. E.g gold, silver etc.
5
Q
Define commodity-backed currency
A
When money can be exchanged for a commodity (e.g gold, silver)
