ReviewQuestions2Fall06

ReviewQuestions2Fall06 - ECON 1000 Exam#2 Review Questions...

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1. Money Supply a) Define the four levels of money supply, M1, M2, M3, and L. 2. Evolution of Money a) Define the three types of money: commodity money, representative money, and credit money. b) What are the desirable characteristics of metal coins? c) What is Gresham’s Law and why is it important in the story of the evolution of money? 3. Functions of Money a) Define “double coincidence of wants.” b) What are the 4 functions of money? c) How many prices does a money economy with 10 goods need? How many prices does a barter economy with 10 goods need? 4. History of Banking a) Define the 5 types of financial institutions before reforms in 1980. b) Which two laws allowed for the reform of US financial institutions over the period 1980 – 1982? c) What are the 5 functions of financial institutions (post 1982)? 5. Money Creation a) What are the three assumptions of the simplified money creation model? 1
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ReviewQuestions2Fall06 - ECON 1000 Exam#2 Review Questions...

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