WORKSHEET 3_answers

WORKSHEET 3_answers - WORKSHEET 3 - ANSWERS Recitation for...

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WORKSHEET 3 - ANSWERS Recitation for Economics 2020-300 – Principles of Macroeconomics Spring 2008 This worksheet covers: Chapter 16 – The Monetary System 1. What are the three functions of money? Medium of exchange, the unit of Account, and store of value 2. What does “Liquidity” mean? The ease with which an asset can be converted into the economy’s medium of exchange. 3. Define “fiat money:” Fiat money is money without intrinsic value that is used as money because of government decree. 4. Which of the following is a store of value? a. currency b. U.S. government bonds c. fine art d. All of the above are correct. 5. When you put money in a cookie jar, which function of money are you using? a. store of value b. medium of exchange c. unit of account d. None of the above is correct. 6. Define the four different measures of the money stock. M1 = currency + demand deposits + traveler’s check + other demand deposits M2 = M1 + saving account deposits + small denomination time deposit + others 1
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This note was uploaded on 02/28/2008 for the course ECON 2010 taught by Professor Mertens,wi during the Fall '07 term at Colorado.

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WORKSHEET 3_answers - WORKSHEET 3 - ANSWERS Recitation for...

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