Money Chapter 21

Question 1

What is Money?

Answer 1

Is anything that is generally and legally accepted as payment for goods and services

Question 2

What are the Function of money?

Answer 2

Medium of exchange
Standard of deferred payment
Unit of account
Store of value

Question 3

What is Medium of exchange ?

Answer 3

Is when money is exchange for the goods or services

Question 4

What is Store of value?

Answer 4

Is when money is used and saved for the future

Question 5

What is Unit of Account ?

Answer 5

Is money used to value goods, services, assets and liabilities

Question 6

What is Standard of Deferred payment?

Answer 6

Is when consumer can buy goods and services now but pay for them later

Question 7

What are the Characteristics/Features of Money?

Answer 7

~ Acceptable
~ Durable
~ Portable
~ Divisibility
~ Homogenous
~ Scarcity

Question 8

What is Portable in Money ?

Answer 8

Money must be easy to carry

Question 9

What is Durability/Durable in Money?

Answer 9

The money must be able to last through numerous amount of transactions

Question 10

What is Divisibility in Money?

Answer 10

The money must be able to divide into smaller units/fractions

Question 11

What is Homogenous in Money?

Answer 11

Is the money must be the same size, weight and texture

Question 12

What is Scarcity in Money?

Answer 12

Makes money desirable to hold

Question 13

What are the types of Money?

Answer 13

~ Token Money
~ Commodity Money
~ Fait Money

Question 14

What is Fiat Money?

Answer 14

Is money declared as legal tender by the Government

Question 15

What is Commodity Money?

Answer 15

Is when the Money has value of both commodity and as money it can be used as a medium of exchange

Question 16

What is Token Money?

Answer 16

When Trader and Banker once issued token as record of money deposit by the public