Econ310_Notes What is Money

Econ310_Notes What is Money - Full detailed notes on Money...

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What is Money? (9/2/2010) Econ 310- 004 Definitions government – a legitimized monopoly on coercion law of association (comparative advantage) – even if someone is absolutely more productive at 2 activities, if he is comparatively more productive at 1 activity than another activity relative to a 2 nd person, then he will be better off specializing and trading than producing in isolation reverse inequality of value – both parties to the trade value what they’re getting more than what they’re giving up barter (direct exchange) – trade for something that can be used directly in consumption or production double coincidence of wants – each person must want the good his trading partner is offering transaction costs – opportunity costs of finding a trading partner, negotiating a deal, and monitoring the terms medium of exchange (indirect exchange) – something not wanted for commodity value, but rather for trade value money – commonly accepted medium of exchange commodity money – money with a close relationship between money value and commodity
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This note was uploaded on 01/26/2011 for the course ECON 310 taught by Professor Staff during the Fall '08 term at George Mason.

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Econ310_Notes What is Money - Full detailed notes on Money...

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