Unformatted text preview: services, no maturity 2H03 Spring 2013 4-2 Money: Functions • Medium of exchange: Money accepted as payment for goods & services • Store of value: transfers purchasing power from the present to the future • High inflation erodes the store-of-value function of money • Unit of account: the common unit by which everyone measures prices and values Money: Types 1. Fiat money has no intrinsic value example: dollar bills or paper currency 2. Commodity money has intrinsic value examples: gold coins, cigarettes in P.O.W. camps...
View Full Document
- Spring '13
- Macroeconomics, substantial price fluctuations