Economics 101: Understanding Money and Monetary Policy, Quizzes of Managerial Economics

Download Economics 101: Understanding Money and Monetary Policy and more Quizzes Managerial Economics in PDF only on Docsity! TERM 1 Barter DEFINITION 1 The exchange of one good or service for another TERM 2 Double coincidence of wants DEFINITION 2 the unlikely occurance that two people each have a good or service the other wants. An example of barter, it explains why an economy uses a common currency TERM 3 Money DEFINITION 3 the set of assets in an economy that people regularly use t buy goods and services from other people. There are 3 functions of money: medium of exchange, unit of account and store of value TERM 4 Medium of exchange DEFINITION 4 an item that buyers give to sellers when they want to purchase goods and services TERM 5 Unit of account DEFINITION 5 the "yardstick" people use to post priced and record debts TERM 6 Store of value DEFINITION 6 an item that people can use to transfer purchasing power from the present to the future The term "wealth" is used to refer to the total of all stores of value (both money and non- monetary assets) TERM 7 Liquidity DEFINITION 7 the ease with which an asset can be converted into the economy's medium of exchange TERM 8 Commodity money DEFINITION 8 money that takes the form of a commodity with intrinsic value (items that would have value even if they were not used as money) TERM 9 Fiat money DEFINITION 9 money without intrinsic value that is used as money because of government decree (eg. paper money) TERM 10 Currency DEFINITION 10 the paper bills and coins in the public hand