Chap2 - Econ 2030 July 1, 2010 Lab 6 1. When something is...

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Econ 2030 July 1, 2010 Lab 6 1. When something is used to pay for a good or service at the time of purchase, it is performing which of the following functions of money? a. Medium of exchange 2. During periods of rapidly increasing prices, money fails to serve as: a. A good store of value 3. In ancient Mesopotamia the accounts of the city’s temples were expressed in silver, although payment seems largely to have been made in barley and oil. Used in this way, silver was serving which of the following functions of money? a. Unit of account 4. If an individual transfers funds from a money market account (M2, not M1) to a demand deposit account, then the M1 money supply ______ and the M2 money supply ______, everything else held constant. a. Increased; remains the same. a.i. Everything in M1 is in M2 a.ii. M2=M1+Stuff 5. When a commercial trade bank extends a loan, everything else held constant, the a. Money multiplier increases a.i. Ms=MBxMoneyMulitplier 6.
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This note was uploaded on 10/25/2011 for the course ENG 220 taught by Professor Zhang during the Winter '09 term at Tianjin University.

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Chap2 - Econ 2030 July 1, 2010 Lab 6 1. When something is...

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