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Chapter 15: Q. 15.1 - Learning Objectives (page 322)

Define the functions of money, identify key properties that money must possess, and explain official definitions of the money supply

Short Answer

Expert verified

The three processes of money are shared by them:

Money is a form of money in the first place, and a measure of value in the second.

Money is a means of exchange, third.

Step by step solution

01

Step: 1  Function of money:

Money serves three main purposes. It is an unit of exchange, a means of payment, and a reserve currency: Medium of Payment: Money functions as an exchange medium when it is utilised to facilitate the exchange of commodities and services.

02

Step: 2 Key properties of money supply:

Longevity, accessibility, fungibility, consistency, low supply, and acceptability are all properties of money.

The three processes of money are shared by them:

Money is a form of money in the first place, and a measure of value in the second.

Money is a means of exchange, third.

03

Step: 3 Money supply definitions:

The supply of money is the entire amount of money in circulation, including cash, coins, and bank account balances. The supply of money is typically characterised as a collection of backed securities that people and companies could use to pay cash or invest in the short term.

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Most popular questions from this chapter

Draw an empty bank balance sheet, with the heading "Assets" on the left and the heading "Liabilities" on the right. Then place the following items on the proper side of the balance sheet.

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b. Deposits this bank holds in an account with another private bank

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Draw an empty bank balance sheet, with the heading "Assets" on the left and the heading "Liabilities" on the right. Then place the following items on the proper side of the balance sheet:

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b. Borrowings from a Federal Reserve district bank

c. Deposits with a Federal Reserve district bank

d. U.S. Treasury bills

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