Week 2 Flashcards
A rising stock market index due to higher share prices
increases people’s wealth and as a result may increase their willingness to spend.
Compared to interest rates on long-term U.S. government bonds, interest rates on three-month Treasury bills fluctuate ________ and are ________ on average.
more; lower
Channeling funds from individuals with surplus funds to those desiring funds when the saver does not purchase the borrower’s security is known as
financial intermediation.
Complete Milton Friedman’s famous statement, “Inflation is always and everywhere a ________ phenomenon.”
recessionary
monetary
There is a ________ association between inflation and the growth rate of money ________.
positive; supply
American farmers who sell beef to Europe benefit most from
an increase in the dollar price of euros.
When in 1985 a British pound cost approximately $1.30, a Shetland sweater that cost 100 British pounds would have cost $130. With a weaker dollar, the same Shetland sweater would have cost
more than $130.
A person’s house is part of her
wealth.
Even economists have no single, precise definition of money because
the “moneyness” or liquidity of an asset is a matter of degree.
Compared to an economy that uses a medium of exchange, in a barter economy
transaction costs are higher.
If the price level doubles, the value of money
falls by 50 percent.
Kevin purchasing concert tickets with his debit card is an example of the ________ function of money.
medium of exchange
A feature of Bitcoin, a new type of electronic money, that make it attractive as a medium of exchange is
anonymous transactions.
An electronic payments system has not completely replaced the paper payments system because of all of the following reasons EXCEPT
transportation costs.
If an individual uses money from a demand deposit account to purchase a U.S. savings bond
M1 decreases and M2 decreases.
