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13 Cards in this Set
- Front
- Back
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Money
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anything that is generally accepted in a community as payment of a good, service, or debt
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Barter
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the exchange of goods and services between individuals or parties
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double coincidence of wants
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both parties must have something that each is willing to exchange
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commodity money
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in it's own right a good, a commodity that could be consumed… the gold and silver could be shaped into other things
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Characterizes of "good" commodity money
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Homogeneous, Divisible, Durable, Portable, Stable, and Optimally Scarce
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Commodity-backed money
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deposit slips… beginning of paper money
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Fiat Money
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Money not backed by a commodity
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Functions of Money
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Unit of Account, Store of Value, Medium of Exchange
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Unit of Account
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Measure of Value
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M1
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Measure of Money = to "print and mint" + Demand accounts
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Demand accounts
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where you can demand your money… checking account
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M2
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Measure of Money = to M1+ "near money"
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Near Money
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a step away from demand accounts… savings
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