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Econ Test 6-andi > Quiz 1 > Flashcards

Quiz 1 Flashcards

0
Q

3 important functions of money

A

Medium of exchange, standard of value, and store of value

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1
Q

Anything that people will accept as payment for goods and services

A

Money

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2
Q

Money must serve as a what?

A

Medium of exchange

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3
Q

A means through which goods and services can be exchanged

A

A medium of exchange

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4
Q

The exchange of goods and services without using money

A

Barter

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5
Q

Determined the economic worth in the exchange process

A

A standard of value

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6
Q

Something that holds its value over time

A

Store of value

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7
Q

A situation where money does not function well as a store of value is when the economy experiences what?

A

Significant inflation

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8
Q

A sustained rise in the general level of prices

A

Inflation

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9
Q

Physical properties of money are what

A

Durability, portability, divisibility, uniformity

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10
Q

Economic properties of money are what

A

Stability of value, scarcity, and acceptability

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11
Q

3 sources of money

A

Commodity money, representative money, fiat money

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12
Q

Derives its value from the type of material from which it is exposed

A

Commodity money

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13
Q

The most common form of commodity money throughout history

A

Coins made from precious metals

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14
Q

Paper money back by something- gold or silver- that gives it value

A

Representative money

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15
Q

The earliest forms of representative money were seen in the _____

A

Middle Ages

16
Q

Began issuing receipts that promised to pay a certain amount of gold or silver

A

Merchants, goldsmiths, and moneylenders

17
Q

These practices signal the beginning of widespread modern use of ____

A

Paper money

18
Q

declared by the government and accepted by citizens to have worth

A

fiat money

19
Q

The value of the US dollar was linked to the value of ____ until 1971

A

gold

20
Q

coins contain only a taken amount of precious metal that is worth less than the face value of those coins

A

fiat money

21
Q

A crucial role of the government in maintaining the value of fiat money is controlling its supply- in other words, maintain its _______

A

scarcity

22
Q

what is currency

A

paper money and coins

23
Q

Checking accounts are called ___

A

demand deposits

24
Q

called so because funds in checking accounts can be converted into currency “on demand”

A

Demand deposits

25
Q

saving accounts, and time deposits that can be converted into cash relatively easy

A

Near money

26
Q

Most demand deposits are _______ that can be converted into currency simply by writing a check

A

non-interest bearing checking accounts

27
Q

also considered demand deposits

A

Travelers checks

28
Q

are interest-bearing savings accounts against which drafts may be written

A

Negotiable order of withdrawal (NOW) accounts

29
Q

______ such as savings accounts and other interest-bearing accounts, cannot be used directly to make transactions

A

Near money

30
Q

funds that people place in a financial institution for a specific period of time in return for a higher interest rate which are often placed in a certificate of deposit (CD)

A

Time deposits

31
Q

place restrictions on the number of transactions you can make in a month and require you to maintain a certain balance in the account in order to receive a higher rate of interest

A

Money market accounts

32
Q

Economists use various instruments to measure the money support but the most often cited are _____

A

m1 and m2

33
Q

the narrowest measure of the money supply, consisting of currency, demand exposure, and other checkable deposits

A

m1

34
Q

The element of m1 are referred to as ______, which means that they are or can easily become currency

A

liquid assets

35
Q

a broader measure of the money supply, consisting of m1 plus various kinds of near money

A

m2

36
Q

M2 includes _____

A

savings accounts, small-denominational time deposits, and money market mutual funds

Econ Test 6-andi (1 decks)

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