Terms
medium of exchange
what is an asset that is going to function as money first must be generally accepted by all sides in a transaction?
the narrowest form of measuring money supply is
what is M1
makes something commodity money
what is easily standardized, easily divisible, easy to carry around, physically durable, broad demand?
Time Value of Money is
What is money received today has a higher value than money received in the future?
unit of account
What is standard, consistent measure of the economic value of goods, services, assets, and liabilities, enabling comparison, valuation, and record-keeping?
the broadest measurement for money supply is
What is M3?
an example of commodity money seen throughout this chapter is
what is Cigarettes in POW camps?
low time preference is
What is being indifferent about getting things now or in the future?
commodity money
what is an asset that is used as money but also has another, or different, use?
M1 consists of
what is currency?
.....happens if the supply increases too rapidly with commodity money
what is Inflation?
Interest does
What is compensating you for waiting longer to obtain something?
monetary aggregates
what is amount of money in circulation in the economy?
M2 consist of
What is all of M1 including deposits and savings?
the most common challenge with using commodity money is
What is having enough in circulation for transactions to occur?
Future Value is
What is the nominal value of an asset, such as money, at some point in the future?
compound interest
what is when you earn interest not only on your initial investment but also on the interest that has already accumulated.
happens if M2 declined...
What is inflation declining?
An example of commodity money that many people still use today is
What is cryptocurrency?
equation for finding the future Value is
What is FV=PU(1+r/m)^MxT