Econ (6)

A double coincidence of wants means that

• each party in an exchange transaction has what the other party desires

• one party in an exchange transaction wants twice what the other party is offering

• both parties desire the same good or service, making exchange impossible.

• an exchange only works if both people want what the other has.

The double coincidence of wants is a problem associated with

• a barter system

• communism

• capitalism

• fiat currency

Which of the following could be classified as money?

• Dollar Bills

• Gold

• Shells

• All of the above

Which of the following is NOT one of the three main functions of money?

• Medium of Exchange

• A Means to Barter

• Unit of Account

• Store of Value

Which of the following is NOT a characteristic of money?

• Uniform

• Portable

• Divisible

• Perishable

Which of the following is the main reason why it is important to limit the supply of money in the economy?

• To decrease interest rates so borrowing is cheaper for consumers

• To prevent inflation and maintain the currency's purchasing power

• To discourage wealth inequality within a country

• To save on the cost of minting paper bills and coins

Which answer correctly puts the history of money in the correct order?

• (1) barter system, (2) commodity money, (3) representative money, (4) fiat money

• (1) commodity money, (2) barter system, (3) fiat money, (4) representative money

• (1) fiat money, (2) commodity money, (3) barter system, (4) representative money

• (1) barter system, (2) commodity money, (3) fiat money, (4) representative money

An example of commodity money would be

• Cattle

• Coins

• Paper Bills

• Cryptocurrency

The paper bills and coins used in the United States are back by gold. This is called The Gold Standard.

• True

• False

What gives fiat money its primary value?

• Its intrinsic value as a physical commodity (ex. paper and ink used to make a bill)

• The government's promise that it can be converted into a fixed amount gold or silver.

• The universal demand for the specific raw materials used to produce the currency

• The full faith, trust, and backing of the U.S. government and its official status as legal tender.