Econ Chapter 14 Notes Flashcards

1
Q

What are the three functions of money?

A
  • Medium of Exchange
  • Measure of Value
  • Store of Value
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2
Q

Medium of Exchange?

A

No need for barter

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3
Q

Double or Mutual Coincidence of Wants?

A
  • Each party has to want what the other has for a barter economy to work
  • Very difficult to achieve
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4
Q

Measure of Value?

A

Used to gauge worth of goods and services

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5
Q

Store of Value?

A

Consumer can save money to use later

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6
Q

Types of Money?

A
  • Commodity
  • Representative
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7
Q

Commodity Money?

A

Money used for something besides money

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8
Q

Representative Money?

A

Has little value except what authority gives it

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9
Q

Characteristics of Money?

A
  • Durable
  • Portable
  • Divisible
  • Stable
  • Limited
  • Acceptable
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10
Q

Functions of The Federal Reserve System

A
  1. Check-clearing
  2. Supervises Banks
  3. Protects Consumers
  4. Supplies Paper Currency
  5. Monetary Policy (Regulates Money Supply)
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