Exam 3: What Is Money

Explain the concepts of wealth and income and how they relate to the concept of money.

All but the most primitive societies use money as a medium of exchange, implying that ________.

Why are most of the U.S. dollars held outside of the United States?

In the money index used by the Bank of Canada: M = X₁ + X₂ + ... + X ₙ, the Xs are ________.

If there are five goods in a barter economy, one needs to know ten prices in order to exchange one good for another. If, however, there are ten goods in a barter economy, then one needs to know ________ prices in order to exchange one good for another.

When paper currency is decreed by governments as legal tender, legally it must be ________.

A hyperinflation is ________.

An electronic payments system has not completely replaced the paper payments system because of all of the following reasons except ________.

________ is used to make purchases while ________ is the total collection of pieces of property that serve to store value.

Which of the following is included in both M1+ and M2?

Money is ________.

Which of the following is not included in M1+ but is included in M1++?

In the country of Moneyland the law allows you to repay mortgage in rocks. Thus, ________.

Explain the relationship between currency and the M1+ monetary aggregate. What does the "plus" sign represent?

Even economists have no single, precise definition of money because ________.

Because inflation in Germany after World War I sometimes exceeded 1000 percent per month, one can conclude that the German economy suffered from ________.

The formula used the Bank of Canada in calculating the money supply is ________.

For a commodity to function effectively as money it must be ________.

Of the following assets, the least liquid is ________.

All of the following are necessary criteria for a commodity to function as money except ________.