MONEY AND ITS FUNCTIONS

Medium of exchange, store of value, and measure of value are all…

• Characteristics of money

• Functions of money

• Types of money

• Measures of money

The definition of Commodity Money can best be described as…

• Paper money distributed by the U.S. government

• Object that has intrinsic value in itself that also serves as money

• Money in the form of cash and coin

• Printed money from State banks

1. In bartering economies, people trade what they __________ for what they ___________.

• Own; buy

• Buy; sell

• Want; need

• Have; need

Money that has value simply because the government says it does is called--

• Credit

• Currency

• Fiat money

• Representative money

One of the disadvantages of operating a barter system is that trading is

• taking place without currency.

• carried out in very large markets.

• limited by availability and demand of goods traded.

• conducted without consumer protections.

One advantage to using a debit card is that it allows the user to

• build a strong credit score

• repay credit card debts faster

• purchase goods without having any money

• access currency without carrying cash

Liquidity can best be described as...

• Requiring prior authorization from bank to access funds

• Easiest exchange of cash and goods and services

• M2 measure of money

• Foreign Deposits

Which of the following is NOT a function of money?

• Store of value

• Unit of account

• Medium of exchange

• Exchange of debt

This type of money is considered legal tender and gets its value from the people's faith in the government.

• Commodity money

• Representative money

• Fiat money