Answered: When you take a vacation and keep cash…

When you take a vacation and keep cash with you in case you might need it, money is serving as a: Question 2 options: Medium of exchange Unit of account Store of value Standard of deferred payments

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.

Question

When you take a vacation and keep cash with you in case you might need it, money is serving as a:

Question 2 options:

	Medium of exchange
	Unit of account
	Store of value
	Standard of deferred payments

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