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Chapter 3 - Chapter 3 Exercise Key terms 1 Commodity money...

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Chapter 3 Exercise: . Key terms 1. Commodity money 2. E-finance 3. E-Cash 4. Fiat Money 5. Hyperinflation 6. Liquidity 7. M1 8. M2 . Multiple Choice 1. Currency includes a. paper money and coins. b. paper money, coins, and checks. c. paper money and checks. d. paper money, coins, checks, and savings deposits. 2. The difference between money and income is that a. money is a flow and income is a stock. b. money is a stock and income is a flow. c. there is no difference—money and income are both stocks. d. there is no difference—money and income are both flows. 3. An individual’s annual salary is her 4. A person’s checking deposits are part of her 5. Money is repayment of debt. 6. Of money’s three functions, the one that distinguishes money from other assets is
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its function as a a. store of value. b. unit of account. c. standard of deferred payment. d. medium of exchange. 7. When economists say that money promotes efficiency, they mean that money
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