Role Of Money And Reasons Change The Curve Of Demand And Supply

Front 1

What are the steps of circular flow of goods and services?

Back 1

1. Households sell resources
2. Firms pay households for their resources
3. Firms turn resources into goods
4. Households give payments to businesses.

Front 2

What do households (consumers) and businesses (sellers) have to give to the government?

Back 2

Households (consumers) have to give resources and businesses (sellers) have to give goods.

Front 3

What do governments do in exchange of goods and resources from consumers and sellers?

Back 3

Governments pay consumers with income and payments to sellers. But governments also collect taxes from consumers and sellers and provide services to both.

Front 4

What is money?

Back 4

Anything that serves as a medium of exchange, unit of account, store of account.

Front 5

There are 3 functions of money, what are they?

Back 5

1. Medium Exchange
2. Unit of account
3. Store of account

Front 6

Define 3 functions of money.

Back 6

1) Medium Exchange: anything that determines value during exchange of goods and services.
2) Unit of account: allow comparison of value of different goods and services.
3) Store of account: money keeps its value if your hold on it.

Front 7

Name all of the characteristics of money.

Back 7

1. Durability
2. Portability
3. Divisibility
4. Uniformity
5. Limited supply
6. Acceptabilty

Front 8

Define all the characteristics of money.

Back 8

1) Durability: strong enough to hold up to lots of use.
2) Portability: easily carried around
3) Divisibility: easily divided into smaller units.
4) Uniformity: must be uniform (the same) for what they will buy.
5) Limited Supply: rare and easily controlled supple of money.
6) Acceptability: everyone must agree to accept it.

Front 9

There are 3 types of money. Name them.

Back 9

1. Commodity Money
2. Representative Money
3. Fiat Money

Front 10

What is commodity money?

Back 10

Money gets its value from its physical form.
(What it is made out of)

Front 11

What is Representative money?

Back 11

Receipt or certificate that can be traded for a certain amount of a physical item such as gold, silver, oil, water, and food.

Front 12

What is Fiat money?

Back 12

Money that gets its value from government decree.

Front 13

Explain the Law of Demand.

Back 13

As prices fall, the quantity needed of a good and service will rise.
- P (Price) & QD (Quantity Demand) have an inverse or opposite relationship.

Front 14

Name 6 reasons that demand curves will shift.

Back 14

1. Income
2. Population - # of consumers
3. Prices of substitute (switch) goods.
4. Prices of complementary goods.
5. Consumers future price expectations.
6. Tastes and Preferences.

Front 15

Name 5 determinants of supply.

Back 15

1. Cost of Resources
2. Number of Supplies
3. Producers future price expectations
4. Technology
5. Taxes & Subsidies