ECO 4223 Exam 1 Guide with Verified Solutions

ECO 4223 Exam 1 Guide with Verified Solutions What is the definition of money? Money is a commonly accepted medium of exchange. What are the common functions of money? Direct exchange and indirect exchange. What is direct exchange? Trading the good you have for the good you want. What is indirect exchange? Trading the good you have for some item, and then exchanging that item for the good you want. What is the store of value function of money? Money serves as a store of value. What is the unit of account function of money? Money serves as a unit of account. What is the difference between inside money and outside money? Outside money is used for final settlement and is not a claim to any other asset, while inside money is a claim to