Unit 4 Test Review

When you trade someone items you have for items that you want. This is called what?

• bartering
• exchanging
• trading
• negotiating

A medium of exchange, standard of value, and store of value are examples of what?

• Characteristics of money

• Purposes of money

• Functions of money

• Functions of a bank

A medium of exchange is ...

• anything that is accepted as a measure of value or wealth

• A way to measure the value or wealth

• It can hold its value over a period of time.

• Goods and Services

The purpose of money is to allow people to

• store wealth
• exchange goods and services more easily

• create inequality
• control others

Stability, scarcity, acceptability, durability, portability, divisibility are examples of what?

• Characteristics of money
• Qualities of money
• Purposes of money

• Functions of money

Money must be stable in value, means what?

• If overly plentiful, it loses its value

• Money must have a fixed exchange rate.
• Money must have a high interest rate.
• Purchasing power should remain relatively constant over time.

Money must be scarce, means what?

• Unlimited supply of money
• Abundance of money
• Equal distribution of money
• Limited supply of money

What is commodity money?

• Currency made of plastic.
• Currency made of valuable materials like gold.

• Currency made of checks and cards

• Currency made of paper.

Storing money, transferring money, and lending money are examples of what?

• business operations
• investment strategies
• banking services
• financial activities

Why is durability a necessary characteristic of money?

• Durability ensures that money can be easily counterfeited.
• Durability allows money to be easily destroyed.
• Durability is not important for money.
• Durability ensures that money can withstand physical wear and tear over time.