Exam (elaborations)
ECO 4223 - FAU - MONEY AND BANKING - EXAM 1 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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ECO 4223 - FAU - MONEY AND BANKING - EXAM 1 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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ECO 4223 - FAU - MONEY AND BANKING- EXAM 1 QUESTIONS AND ANSWERS
WITH SOLUTIONS 2024
What is money? - ANSWER anything that serves as a medium of exchange, a unit of account, and a store
of value
What is a stock or a flow? - ANSWER Money
Wealth - ANSWER a stock of money, the total collection of pieces of property that serve a to store value
Income - ANSWER a flow contruct, flow of earning over time
Functions of Money - ANSWER medium of exchange
unit of account
store of value
Medium of Exchange eliminates - ANSWER the trouble of finding a double coincidence of needs
Medium of exchange promotes - ANSWER specialization
Medium of exchange must be easily - ANSWER standardized
Medium of exchange must be widely - ANSWER accepted
Medium of exchange must be - ANSWER divisible
Medium of exchange must be easy to - ANSWER carry
Medium of exchange must not - ANSWER deteriorate quickly
, Unit of Account is used to - ANSWER measure value in the economy
Unit of Account reduces - ANSWER transaction costs
Store of Value used to - ANSWER save purchasing power over time
Store of Value and other assets - ANSWER also serve this fuction
Store of Value money is the most - ANSWER liquid of all assets but loses value during inflation
Measuring Money is done by - ANSWER monetary aggregates
Measuring Money is in two forms, - ANSWER M1 and M2
M1 is - ANSWER the most liquid because it includes currency, travelers checks, demand deposits, and
other checkable deposits
M1 consists of - ANSWER currency, travelers checks, demand deposits, and other checkable deposits
M2 consists of - ANSWER M1 and other assets that aren't as liquid like savings deposits CD's, money
market accounts, and mutual fund shares
Bitcoin is - ANSWER electronic money created in 2009
Bitcoin is created by - ANSWER decentralized users through the computer to verify transactions
Bitcoin as a medium of exchange is - ANSWER a good medium and can be used for exchange of other
items
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