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?
What is the narrowest form of measuring money supply?
what is M1
What makes something commodity money?
what is easily standardized, easily divisible, easy to carry around, physically durable, broad demand?
What is Time Value of Money?
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?
What is the broadest measurement for money supply?
What is M3?
What is an example of commodity money seen throughout this chapter?
what is Cigarettes in POW camps?
What is low time preference?
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?
What does M1 consist of?
what is currency?
What happens of the supply increases too rapidly with commodity money?
what is Inflation?
What is interest doing?
What is compensating you for waiting longer to obtain something?
monetary aggregates
what is amount of money in circulation in the economy?
What does M2 consist of?
What is all of M1 including deposits and savings?
What is the most common challenge with using commodity money?
What is having enough in circulation for transactions to occur?
What is Future Value?
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.
What would happen to the rate of inflation if M2 declined?
What is inflation declining?
What is an example of commodity money that many people still use today?
What is cryptocurrency?