Ashley Parkman

Ashley Parkman - Chapter 14 1.2 If the face value of a coin...

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Chapter 14 1.2 If the face value of a coin exceeds the cost of coinage, the resulting revenue to the issuer of the coin is known as TOKEN MONEY. A product that serves both as money and as commodity is CORN. (gold and silver, cattle, and tobacco) Most coins and paper money circulating in the United States have face values that exceeds the value of the materials from which they are made. Therefore they are forms of TOKEN MONEY. If the government declares that creditors must accept a form of money as payment for debts, the money becomes LEGAL TENDER A common unit for measuring the value of every good or service in the economy is known as a(n) UNIT OF ACCOUNT 1.4 When the value of money was based on its gold content, new discoveries of gold were frequently followed by periods of inflation. Explain. The more there is of something, the less rare it becomes, and since money's value was based on its gold content , the value of money dropped when more gold was found, making both gold and money less rare. Therefore, to make the same profit, shops had to raise prices, causing inflation. 2.1 What is a depository institution, and what types of depository institutions are found in the United States? How do they act as intermediaries between savers and borrowers? Why do they play this role? Banks, credit unions , savings & loan institutions; they act as intermediaries because they accept deposits from savers and lend it to borrowers. The financial institution is the joint in the middle of the transactions. They play this role because this is how the financial
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Ashley Parkman - Chapter 14 1.2 If the face value of a coin...

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