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riggers unit 4 test| Questions and 100% Complete Solutions $12.99   Add to cart

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riggers unit 4 test| Questions and 100% Complete Solutions

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riggers unit 4 test| Questions and 100% Complete Solutions

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  • October 26, 2024
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  • 2024/2025
  • Exam (elaborations)
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riggers unit 4 test| Questions and 100%
Complete Solutions

Commodity Money - ✔Money with intrinsic value, e.g., gold or silver



Fiat Money - ✔Money that serves as currency due to government decree



Purchasing Power of Money - ✔The amount of goods and services a unit of money can
buy



three functions of money - ✔1. medium of exchange
2. unit of account
3. store of value



Inflation - ✔The decrease in the value of money due to increased prices



Classifying money - ✔M1. (Highest Liquidity) The most immediate form of
money. Currency in circulation
checks in bank
deposits/checking accounts
M2. (Near- Moneys)
M1 AND
time deposits (certificates of deposits or CD)
Money market bonds

, monetary base - ✔the sum of currency in circulation and bank reserves aka M0



Fractional Reserve Banking - ✔A banking system where only a fraction of deposits
is backed by actual cash on hand



Money Multiplier - ✔The factor by which an increase in reserves will lead to a
larger increase in the money supply
= 1/reserve requirement ratio



Demand Deposits - ✔Funds deposited in a bank that are available on demand



Required Reserves - ✔The percentage of deposits that banks must hold by law



Excess Reserves - ✔The amount that a bank can loan out after fulfilling the
required reserves



Balance Sheet - ✔A record of a bank's assets, liabilities, and net worth



Asset - ✔A resource with economic value that an individual or company can use



Liability - ✔Something an individual or company owes



Transaction demand for money - ✔Money held for everyday transactions



Asset demand for money - ✔Money held as it is less risky than other assets



Opportunity cost of holding money - ✔Interest lost by not investing in other assets

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