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7 Cards in this Set

  • Front
  • Back
what are the 3 principal uses of money?
1.) medium of exchange
2.) unit of account
3.) store of value
how is money used as a medium of exchange?
we use it to exchange goods and services indirectly (i'll give you $10 for that share of stock)
how is money used as a unit of account
it measures the value of something (that share of stock is $10)
how is money used as a store of value?
you can keep your wealth in money (i am holding onto this $10 which makes me worth $10 more)
what is M0?
cash
what is M1?
M0(cash), demand deposits, checking accounts, traveler's checks
what is M2?
M1(cash and checking accounts), saving deposits, small-denomination time deposits, money market mutual funds