ECON 3200 exam 1 study questions with |\ |\ |\ |\ |\ |\ |\
answers
What's the definition of money in an economists view and
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the general public? - CORRECT ANSWERS ✔✔General
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public: money=income/wealth
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Economists: narrow class of assets with special properties |\ |\ |\ |\ |\ |\ |\
Define wealth... - CORRECT ANSWERS ✔✔The total stock
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of pieces of property that serve to store value
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Define income... - CORRECT ANSWERS ✔✔A flow of
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earnings per unit of time |\ |\ |\ |\
What is the main difference between wealth and income?
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- CORRECT ANSWERS ✔✔The main difference is one is a
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stock and one is a flow of value
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(neither are actually considered money)
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What are the three functions of money? - CORRECT
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ANSWERS ✔✔1. Medium of exchange |\ |\ |\ |\
2. Unit of account
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3. Store of value
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,Define medium of exchange... - CORRECT ANSWERS
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✔✔An instrument for purchasing goods and services
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Define transaction cost... - CORRECT ANSWERS ✔✔Time
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or financial cost incurred trying to exchange goods or
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services
Define double coincidence of want... - CORRECT
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ANSWERS ✔✔Each party to a transaction must have
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something the other wants |\ |\ |\
Historical commodities that have been used in
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transactions... - CORRECT ANSWERS ✔✔-cattle and other |\ |\ |\ |\ |\ |\ |\
livestock
-tobacco and whiskey |\ |\
-cigarettes
What are the five standards?
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Any medium of exchange must be... - CORRECT
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ANSWERS ✔✔1. Standardized |\ |\
2. Widely accepted
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3. Divisible
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4. Easy to carry
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, 5. durable
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Define unit of account... - CORRECT ANSWERS ✔✔A
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commodity that is used to measure value in the economy |\ |\ |\ |\ |\ |\ |\ |\ |\
How do we find number of prices? - CORRECT ANSWERS
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✔✔N(N-1) / 2 |\ |\
Define store of value... - CORRECT ANSWERS ✔✔A
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repository of purchasing power over time |\ |\ |\ |\ |\
Why do we hold money? - CORRECT ANSWERS ✔✔-money
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pays no interest or dividends
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-money's value depreciates over time |\ |\ |\ |\
-because it's liquid |\ |\
Define liquidity... - CORRECT ANSWERS ✔✔The relative
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ease and speed with which an asset can be converted
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into a medium of exchange
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(depends on the # of buyers) |\ |\ |\ |\ |\
Define hyperinflation... - CORRECT ANSWERS ✔✔High
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levels of inflation |\ |\
answers
What's the definition of money in an economists view and
|\ |\ |\ |\ |\ |\ |\ |\ |\
the general public? - CORRECT ANSWERS ✔✔General
|\ |\ |\ |\ |\ |\ |\ |\
public: money=income/wealth
|\
Economists: narrow class of assets with special properties |\ |\ |\ |\ |\ |\ |\
Define wealth... - CORRECT ANSWERS ✔✔The total stock
|\ |\ |\ |\ |\ |\ |\ |\
of pieces of property that serve to store value
|\ |\ |\ |\ |\ |\ |\ |\
Define income... - CORRECT ANSWERS ✔✔A flow of
|\ |\ |\ |\ |\ |\ |\ |\
earnings per unit of time |\ |\ |\ |\
What is the main difference between wealth and income?
|\ |\ |\ |\ |\ |\ |\ |\
- CORRECT ANSWERS ✔✔The main difference is one is a
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
stock and one is a flow of value
|\ |\ |\ |\ |\ |\ |\
(neither are actually considered money)
|\ |\ |\ |\
What are the three functions of money? - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔1. Medium of exchange |\ |\ |\ |\
2. Unit of account
|\ |\ |\
3. Store of value
|\ |\ |\
,Define medium of exchange... - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\
✔✔An instrument for purchasing goods and services
|\ |\ |\ |\ |\ |\
Define transaction cost... - CORRECT ANSWERS ✔✔Time
|\ |\ |\ |\ |\ |\ |\
or financial cost incurred trying to exchange goods or
|\ |\ |\ |\ |\ |\ |\ |\ |\
services
Define double coincidence of want... - CORRECT
|\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔Each party to a transaction must have
|\ |\ |\ |\ |\ |\ |\ |\
something the other wants |\ |\ |\
Historical commodities that have been used in
|\ |\ |\ |\ |\ |\ |\
transactions... - CORRECT ANSWERS ✔✔-cattle and other |\ |\ |\ |\ |\ |\ |\
livestock
-tobacco and whiskey |\ |\
-cigarettes
What are the five standards?
|\ |\ |\ |\
Any medium of exchange must be... - CORRECT
|\ |\ |\ |\ |\ |\ |\ |\
ANSWERS ✔✔1. Standardized |\ |\
2. Widely accepted
|\ |\
3. Divisible
|\
4. Easy to carry
|\ |\ |\
, 5. durable
|\
Define unit of account... - CORRECT ANSWERS ✔✔A
|\ |\ |\ |\ |\ |\ |\ |\
commodity that is used to measure value in the economy |\ |\ |\ |\ |\ |\ |\ |\ |\
How do we find number of prices? - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔N(N-1) / 2 |\ |\
Define store of value... - CORRECT ANSWERS ✔✔A
|\ |\ |\ |\ |\ |\ |\ |\
repository of purchasing power over time |\ |\ |\ |\ |\
Why do we hold money? - CORRECT ANSWERS ✔✔-money
|\ |\ |\ |\ |\ |\ |\ |\
pays no interest or dividends
|\ |\ |\ |\ |\
-money's value depreciates over time |\ |\ |\ |\
-because it's liquid |\ |\
Define liquidity... - CORRECT ANSWERS ✔✔The relative
|\ |\ |\ |\ |\ |\ |\
ease and speed with which an asset can be converted
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
into a medium of exchange
|\ |\ |\ |\
(depends on the # of buyers) |\ |\ |\ |\ |\
Define hyperinflation... - CORRECT ANSWERS ✔✔High
|\ |\ |\ |\ |\ |\
levels of inflation |\ |\
