Lesson 1230 of 1524
Money and Banking
M2 includes all of M1, plus savings deposits, time deposits like certificates of deposit, and money market funds
Practice this chapterM2 includes all of M1, plus savings deposits, time deposits like certificates of deposit, and money market funds There are two types of money: commodity money, which is an item used as money, but which also has value from its use as something other than money; and fiat money, which has no intrinsic value, but is declared by a…
Money serves several functions: a medium of exchange, a unit of account, a store of value, and a standard of deferred payment. We measure money with several definitions: M1 includes currency and money in checking accounts (demand deposits).
money — whatever serves society in four functions: as a medium of exchange, a store of value, a unit of account, and a standard of deferred payment. money market fund — the deposits of many investors are pooled together and invested in a safe way like short-term government bonds. commodity money — an item that is used as money, but which also has value from its use as something other than money. demand deposit — checkable deposit in banks that is available by making a cash withdrawal or writing a check.
Worked example
What does “money” mean in Money and Banking?
- 1Use the wording this chapter gives for money.
- 2The book says: whatever serves society in four functions: as a medium of exchange, a store of value, a unit of account, and a standard of deferred payment.
- 3Do not use the meaning of money market fund. That term means the deposits of many investors are pooled together and invested in a safe way like short-term government bonds.
Result: whatever serves society in four functions: as a medium of exchange, a store of value, a unit of account, and a standard of deferred payment
Why. That is the meaning this chapter gives for money.
Do not swap money and money market fund. money means whatever serves society in four functions: as a medium of exchange, a store of value, a unit of account, and a standard of deferred payment. money market fund means the deposits of many investors are pooled together and invested in a safe way like short-term government bonds.
Practice margin
This chapter
A fresh set from this chapter only. Choose 10 or 20. Multiple choice and fill-in, with no repeat inside the set.