The function of money Flashcards
1
Q
Definition of barter
A
the exchange of goods and services for other goods and services without using money
2
Q
Definition of money
A
a medium that can be exchanged for goods and services and is used a measure of their values on the market
3
Q
First function of money
A
medium of exchange— used to facilitate transactions, and we accept it because everyone does
4
Q
Second function of money
A
store of value— money retains value over time, thereby allowing people to transfer purchasing power from today to in the future (barter products are not often goods stores of value)
5
Q
Third function of money
A
unit of account — money allows goods and services to be priced in a comparable manner.
