ch 3 - 2008-10-01 Money Economist definition: anything that...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
05:34 Money Economist definition: anything that is generally accepted in payment for goods or  services or in the repayment of debts. Examples: Currency (paper money and coins), Checking deposits (checks),  Savings Deposits Money is a  stock variable : It is a  certain amount  at a given point in time. Money is separate from income and wealth. Wealth Total collection of resources owned by an individual, including all asset. Total collection of pieces of property that serve to store value. Wealth is a  stock variable = how much you own — how much you owe. Includes: money, bonds, common stock, art, land, furniture, cars…etc. Income A flow of earnings per unit of time. It is a  flow variable  meaning there is a time unit attached to it. Money most Meet Certain Criteria     : Easily standardized , making it simple to ascertain its value. Widely accepted —money is used by government, but we must accept it in order  for it to work. Divisible —able to “make change” Easy to carry Cant deteriorate quickly Three Primary Functions of Money     Medium of Exchange Anything that is used to pay for goods and services, money in the form of  currency or checks. Promotes economic efficiency by minimizing the time spend in exchanging goods  and services (transaction cost) and allowing people to specialize in what they do  best. Barter Economy - one without money, in which goods and services are exchanged  directly for other goods and services—transaction cost are high.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Unit of Account Used to measure value in the economy. Written record of transactions. Examples: gas station prices, receipts Measures the value of goods and services. All prices are quoted in terms of units of that money.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/01/2008 for the course ECON 2035 taught by Professor Stahl during the Spring '08 term at LSU.

Page1 / 7

ch 3 - 2008-10-01 Money Economist definition: anything that...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online