Lecture 23 Overview

The nature and functions of money are:

• Medium of exchange, store of value, unit of account

• Only a medium of exchange

• Only a store of value

• Only a unit of account

What is Monetary Policy?

• A government policy related to taxation

• A policy that controls the supply of money

• A policy for regulating international trade

• A policy for managing public health

What is Central Bank credibility?

• The ability of the central bank to influence interest rates

• The trust in the central bank's ability to manage inflation

• The central bank's role in regulating commercial banks

• The central bank's power to print money

What is Quantitative Easing?

• A monetary policy where a central bank buys government securities or other securities from the market to lower interest rates and increase the money supply.

• A fiscal policy where the government increases spending to boost economic growth.

• A strategy used by companies to reduce production costs.

• A method of increasing taxes to reduce inflation.

The Euro is:

• a type of currency used in the European Union.

• a type of food.

• a famous landmark in Europe.

• a traditional European dance.

The definition of money is:

• A medium of exchange

• A type of investment

• A form of entertainment

• A government policy

A medium of exchange is:

• a tool for measuring temperature

• a method of communication

• an instrument used to facilitate the sale, purchase, or trade of goods between parties

• a device for measuring distance

The function of money as a medium of exchange is to:

• store value

• facilitate trade

• measure wealth

• create money

Money functions as a unit of account by:

• providing a standard measure of value for goods and services

• serving as a medium of exchange

• acting as a store of value

• being a physical representation of wealth

The function of money as a store of value is to:

• facilitate trade by eliminating the need for a coincidence of wants.

• provide a means to measure the value of goods and services.

• allow individuals to save and retrieve wealth over time.

• serve as a universally accepted medium of exchange.