The meaning of money.

Question

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Answer 1

Question

Chapter 14, Problem 1SQP

To determine

The meaning of money.

Expert Solution & Answer

Explanation of Solution

The barter system was a market exchange system that existed in the ancient period. According to the barter system, one commodity is exchanged for another commodity in the market. Thus, there should be double co-incidence of needs for the exchange to take place in the market. This problem was corrected with the establishment of money. Money is anything that serves as a medium of exchange in the market, unit of account as well as the store of value in the economy. There are many forms of money such as paper currencies, metallic coins, bills, and so forth.

Thus, money is worthless on its own. It becomes worthy when it is used for the purposes stated above. However, in this case, an individual is lost in the dessert and he has a million dollars with him. However, he cannot make use of his money to do any transaction, as there is no market in the dessert, and hence the money becomes worthless. Thus, this teaches the person that money is worthless when it is not used for transaction, store of value, and unit of account purposes.

Economics Concept Introduction

Money: Money is anything that has basically three functions such as the medium of exchange, unit of account, and store of value in an economy.

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Students have asked these similar questions

In a small open economy with a floating exchange rate, the supply of real money balances is fixed and a rise in government spending ______ Group of answer choices Raises the interest rate so that net exports must fall to maintain equilibrium in the goods market. Cannot change the interest rate so that net exports must fall to maintain equilibrium in the goods market. Cannot change the interest rate so income must rise to maintain equilibrium in the money market Raises the interest rate, so that income must rise to maintain equilibrium in the money market.

Suppose a country with a fixed exchange rate decides to implement a devaluation of its currency and commits to maintaining the new fixed parity. This implies (A) ______________ in the demand for its goods and a monetary (B) _______________. Group of answer choices (A) expansion ; (B) contraction (A) contraction ; (B) expansion (A) expansion ; (B) expansion (A) contraction ; (B) contraction

Assume a small open country under fixed exchanges rate and full capital mobility. Prices are fixed in the short run and equilibrium is given initially at point A. An exogenous increase in public spending shifts the IS curve to IS'. Which of the following statements is true? Group of answer choices A new equilibrium is reached at point B. The TR curve will shift down until it passes through point B. A new equilibrium is reached at point C. Point B can only be reached in the absence of capital mobility.

Answer 2

Question

Chapter 14, Problem 1SQP

To determine

The meaning of money.

Expert Solution & Answer

Explanation of Solution

The barter system was a market exchange system that existed in the ancient period. According to the barter system, one commodity is exchanged for another commodity in the market. Thus, there should be double co-incidence of needs for the exchange to take place in the market. This problem was corrected with the establishment of money. Money is anything that serves as a medium of exchange in the market, unit of account as well as the store of value in the economy. There are many forms of money such as paper currencies, metallic coins, bills, and so forth.

Thus, money is worthless on its own. It becomes worthy when it is used for the purposes stated above. However, in this case, an individual is lost in the dessert and he has a million dollars with him. However, he cannot make use of his money to do any transaction, as there is no market in the dessert, and hence the money becomes worthless. Thus, this teaches the person that money is worthless when it is not used for transaction, store of value, and unit of account purposes.

Economics Concept Introduction

Money: Money is anything that has basically three functions such as the medium of exchange, unit of account, and store of value in an economy.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 14, Problem 1SQP

To determine

The meaning of money.

Expert Solution & Answer

Explanation of Solution

The barter system was a market exchange system that existed in the ancient period. According to the barter system, one commodity is exchanged for another commodity in the market. Thus, there should be double co-incidence of needs for the exchange to take place in the market. This problem was corrected with the establishment of money. Money is anything that serves as a medium of exchange in the market, unit of account as well as the store of value in the economy. There are many forms of money such as paper currencies, metallic coins, bills, and so forth.

Thus, money is worthless on its own. It becomes worthy when it is used for the purposes stated above. However, in this case, an individual is lost in the dessert and he has a million dollars with him. However, he cannot make use of his money to do any transaction, as there is no market in the dessert, and hence the money becomes worthless. Thus, this teaches the person that money is worthless when it is not used for transaction, store of value, and unit of account purposes.

Economics Concept Introduction

Money: Money is anything that has basically three functions such as the medium of exchange, unit of account, and store of value in an economy.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 14, Problem 1SQP

To determine

The meaning of money.

Expert Solution & Answer

Explanation of Solution

The barter system was a market exchange system that existed in the ancient period. According to the barter system, one commodity is exchanged for another commodity in the market. Thus, there should be double co-incidence of needs for the exchange to take place in the market. This problem was corrected with the establishment of money. Money is anything that serves as a medium of exchange in the market, unit of account as well as the store of value in the economy. There are many forms of money such as paper currencies, metallic coins, bills, and so forth.

Thus, money is worthless on its own. It becomes worthy when it is used for the purposes stated above. However, in this case, an individual is lost in the dessert and he has a million dollars with him. However, he cannot make use of his money to do any transaction, as there is no market in the dessert, and hence the money becomes worthless. Thus, this teaches the person that money is worthless when it is not used for transaction, store of value, and unit of account purposes.

Economics Concept Introduction

Money: Money is anything that has basically three functions such as the medium of exchange, unit of account, and store of value in an economy.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 14, Problem 1SQP

To determine

The meaning of money.

Expert Solution & Answer

Explanation of Solution

The barter system was a market exchange system that existed in the ancient period. According to the barter system, one commodity is exchanged for another commodity in the market. Thus, there should be double co-incidence of needs for the exchange to take place in the market. This problem was corrected with the establishment of money. Money is anything that serves as a medium of exchange in the market, unit of account as well as the store of value in the economy. There are many forms of money such as paper currencies, metallic coins, bills, and so forth.

Thus, money is worthless on its own. It becomes worthy when it is used for the purposes stated above. However, in this case, an individual is lost in the dessert and he has a million dollars with him. However, he cannot make use of his money to do any transaction, as there is no market in the dessert, and hence the money becomes worthless. Thus, this teaches the person that money is worthless when it is not used for transaction, store of value, and unit of account purposes.

Economics Concept Introduction

Money: Money is anything that has basically three functions such as the medium of exchange, unit of account, and store of value in an economy.

Answer 6

Chapter 14, Problem 1SQP

To determine

The meaning of money.

Expert Solution & Answer

Explanation of Solution

The barter system was a market exchange system that existed in the ancient period. According to the barter system, one commodity is exchanged for another commodity in the market. Thus, there should be double co-incidence of needs for the exchange to take place in the market. This problem was corrected with the establishment of money. Money is anything that serves as a medium of exchange in the market, unit of account as well as the store of value in the economy. There are many forms of money such as paper currencies, metallic coins, bills, and so forth.

Thus, money is worthless on its own. It becomes worthy when it is used for the purposes stated above. However, in this case, an individual is lost in the dessert and he has a million dollars with him. However, he cannot make use of his money to do any transaction, as there is no market in the dessert, and hence the money becomes worthless. Thus, this teaches the person that money is worthless when it is not used for transaction, store of value, and unit of account purposes.

Economics Concept Introduction

Money: Money is anything that has basically three functions such as the medium of exchange, unit of account, and store of value in an economy.

Answer 7

Chapter 14, Problem 1SQP

To determine

The meaning of money.

Answer 8

Expert Solution & Answer

Explanation of Solution

The barter system was a market exchange system that existed in the ancient period. According to the barter system, one commodity is exchanged for another commodity in the market. Thus, there should be double co-incidence of needs for the exchange to take place in the market. This problem was corrected with the establishment of money. Money is anything that serves as a medium of exchange in the market, unit of account as well as the store of value in the economy. There are many forms of money such as paper currencies, metallic coins, bills, and so forth.

Thus, money is worthless on its own. It becomes worthy when it is used for the purposes stated above. However, in this case, an individual is lost in the dessert and he has a million dollars with him. However, he cannot make use of his money to do any transaction, as there is no market in the dessert, and hence the money becomes worthless. Thus, this teaches the person that money is worthless when it is not used for transaction, store of value, and unit of account purposes.