Part 1.docx - First 1 What are the six characteristics of money Explain how the U.S dollar has those six characteristics 1 Acceptability the dollar is

Part 1.docx - First 1 What are the six characteristics of...

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First 1.What are the six characteristics of money? Explain how the U.S. dollar has those sixcharacteristics. 1. Acceptability – the dollar is acceptable as payment for goods and services and settlement of debts. 2. Divisibility – money must be divisible into small units to facilitate exchanges. The dollar is divisible into pennies, nickels, dimes, and quarters. 3. Portability – money must be easily transported. The dollar is lightweight and folds easily. 4. Durability – dollars last an average of eighteen months and can be folded thousands of times. 5. Stability – the dollar is reasonably stable. A dollar will buy a dollar's worth of goods and services today or next week. 6. Difficulty of counterfeiting – the dollar is extremely difficult to counterfeit because of the paper and ink used in printing. 2. What is the difference between a credit card and a debit card? Why are credit cards considerably more popular with U.S. consumers? A credit card allows consumers to make purchases and pay for them over time at a specified interest rate. With a debit card, the amount of a purchase is immediately deducted from the consumer's account, if enough funds are available. Credit cards are considerably more popular with U.S consumers because they allow instant financing of purchases and are generally accepted around the world. Debit cards, however, are beginning to grow in popularity because of their convenience. 3.Discuss the four economic goals the Federal Reserve must try to achieve with itsmonetary policy.
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4.Explain how the Federal Reserve uses open market operations to expand andcontract the money supply.
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