he velocity of money represents: (a) Whether individuals are increasing or decreasing the quantity of money spent in an economy (b) The quantity of money available in an economy (c) The level of prices determined by the equation of exchange (d) How often money is used in a specific period of time (e) Whether currency is accepted as a medium of exchange in an economy

he velocity of money represents: (a) Whether individuals are increasing or decreasing the quantity of money spent in an economy (b) The quantity of money available in an economy (c) The level of prices determined by the equation of exchange (d) How often money is used in a specific period of time (e) Whether currency is accepted as a medium of exchange in an economy

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter25: Money, Banking, And The Federal Reserve System

Section: Chapter Questions

Problem 1P

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Please answer questions 4 and 5
In a less-developed economy, cattle is widely accepted as payment for goods and services. Nearly all goods and services are priced in terms of cattle; however, cows vary in quality, become less valuable with age, and are difficult to move over long distances. Which of the following functions of money do cattle provide? Select the two correct answers. portability uniformity medium of exchange unit of account store of value
That money can be used to repay loans relates to money's function as a A) Standard of deferred payment store of value B) Medium of exchange C) Mediator of Value
Money is commonly defined as A generally accepted medium of exchange. A U.S. dollar. Paper currency and coinage. Precious metals.
One limitation of using money as a store of value is that: a) money needs to be divisible and portable b) money loses value over time due to inflation c) money is not readily acceptable everywhere in return for goods and services d) money is not very liquid
According to the equation of exchange, if the money supply is $700 million, real GDP is $1,600 million, and nominal GDP is $3,220 million, then the velocity of money is equal to:
a) Which of the following is not true? In a monetary economy, economic goods and services have both a relative price and nominal price In a barter economy, nominal price inflation is possible Aggregate supply and Aggregate demand curves determine the price level If the nominal interest rate is below the real rate of interest, deflation of nominal prices is expected in the future It is logically possible for the nominal price of every economic good and service to increase b) Which of the following not true with respect to money? Money evolved from barter exchange Money solves the “double co-incidence” of wants problem Many economic goods have served as money including livestock, tobacco, and furs or skins Paper money originated in Europe in 1641 because of legal tender laws The first coins were minted in the Kingdom of Lydia 650 BC
As early as the year 1000 CE, nigeria used silver and other metal coins as currency. This is an example of bartercommodity/ moneyrepresentative (commodity-backed)/ moneyfiat money. In 1695, a private bank was granted the right to issue notes that were convertible to silver. This is an example of bartercommodity/ moneyrepresentative (commodity-backed)/ moneyfiat money. After the collapse of this system, a few new systems were implemented, most of which also adopted the silver standard. In 1873, the nigerian currency was introduced, and it was directly convertible to gold. This is an example of bartercommodity/ moneyrepresentative (commodity-backed)/ moneyfiat money. . For the next 100 years, the nigerian currency fell off and on the gold standard until it finally abandoned the gold standard for good in 1971. The nigerian currencyremained pegged to various other currencies until 1992, when it was allowed to float. Today, the nigerian currency follows the price of oil pretty…
The central bank of the Bahamas country decides to pursue an expansionary monetary policy. (i) Identify one possible action they could take. (ii) Carefully explain, in as much detail as possible, how the chosen action will impact the money market. (iii) Illustrate the overall impact of the chosen action on the money market.
The velocity of money A) is calculated as P/M. B) indicates the number of times per year a currency unit is used as a medium of exchange. C)indicates the speed with which the Canadian Treasury can mint new currency. D) is equal to 2k in the Cambridge equation.
Which of the below statements DOES NOT CORRECTLY capture the meaning of the word "money" as economists use the term, and as Charles Wheelan explains the term? Group of answer choices Whatever serves as money must be available in abundance, and must not be scarce. It serves as a medium of exchange, something that facilitates trade and transactions. It serves as a unit of account, so that the costs of all kinds of goods and services can be measured can be compared using one scale. Whatever serves as money must be portable and durable.
Suppose a group of people decided to create their own economic system with cartons of milk serving as money. If we decided to use this “liquid asset” as our medium of exchange and all prices were measured in cartons of milk, milk would still not be a good form of money because it would not be a good: A) unit of account. B) medium of exchange. C) store of value. D) near-money.