Functions of money, properties of money and official definitions of the money supply.

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Answer 1

Question

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

Chapter 15, Problem 15.1LO

To determine

Functions of money, properties of money and official definitions of the money supply.

Expert Solution & Answer

Explanation of Solution

There are four functions of money, these are as follows:

(a) Medium of exchange: It means the payment for exchange of goods and services have to be made in terms of money. Goods and services are exchanged for money when people either buy things or sell things.

It solves the problem of double coincidence of wants inherit in barter system.
It facilitates trade and wider its area.
It is essential for conducting transactions in a market economy.

(b) Measure of value: Since money is generally acceptable works as a common denominator in which values of all goods and services are expressed. When the value of a commodity is expressed in terms of money, it is known as single unit (price), it becomes easy to find out the exchange ratio between them. Money helps in calculating relative prices of goods and services.

(c) Standard of deferred payment: It refers to those payments which are to be made in near future. Credit transactions have become the life and blood of modern economic system. Every day, millions of transactions take place in which payments are not made immediately. Money helps and encourages such transactions & helps in capital formation, economic development of the country.

It has facilitated the borrowings and lending activities.
It has lead to the creation of financial institutions.

(d) Store value: Money as a store value means that money is an asset and can be used to store to use in future. One can hold one’s earnings until the time one wants to spend it.

It comes in convenient denomination.
It is easily portable. It requires less space.
It is easily exchanged for goods at all time.

The properties of money are:

(1) Durable: It means that money is durable and can be withstand being used repeatedly.

(2) Divisible: It can divided into smaller units.

(3) Limited in supply: The supply of money is controlled by the government. Nobody other than government can supply the money in the country.

(4) Portable: Money is portable. The individuals can carry it easily wherever they go and transfer it to others.

The official definitions of money supply are given below:

Money supply refers to the official stock of money supplied in a country at a particular point of time. There are some measures of money supply, these are:

M1. Currency in circulation + Demand deposits.

M2. M1. Short term time deposits in the banks & 24-hour money market funds.

M3. M2. Long-term time deposits & money market funds with more than 24-hour maturity.

M4. M3. other deposits.

Economics Concept Introduction

Introduction:

Money: It is generally accepted as a medium of exchange of goods and services.

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Students have asked these similar questions

2.) Using the line drawing tool, plot and label the isocost line. Carefully follow the instructions above, and only draw the required objects. FILL IN BLANK d. Now suppose the price of labour rises to $5 per unit, but the firm still wants to produce 500 tires per day. Explain how a cost-minimizing firm adjusts to this change (with no change in technology). A cost-minimizing firm will be producing on ▼ The samedifferently slopedparallel isocost line. The firm will use ▼ moresameless labour and ▼ less the same amount of more capital and produce on ▼ a higher point on the same a lower point on the same a lower a higher isoquant curve.

QK Using the graph on the right, determine how the firm should change the quantity of the production factors in order to reduce the costs. The firm that is producing at point A can reduce its costs for producing 2000 units by employing A. same capital and more labour. B. less capital and more labour. ○ C. less capital and the same labour. D. more capital and more labour. OE. more capital and less labour. C A B Q =4000 Q = 2000 C Isocost line QL

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Answer 2

Question

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

Chapter 15, Problem 15.1LO

To determine

Functions of money, properties of money and official definitions of the money supply.

Expert Solution & Answer

Explanation of Solution

There are four functions of money, these are as follows:

(a) Medium of exchange: It means the payment for exchange of goods and services have to be made in terms of money. Goods and services are exchanged for money when people either buy things or sell things.

It solves the problem of double coincidence of wants inherit in barter system.
It facilitates trade and wider its area.
It is essential for conducting transactions in a market economy.

(b) Measure of value: Since money is generally acceptable works as a common denominator in which values of all goods and services are expressed. When the value of a commodity is expressed in terms of money, it is known as single unit (price), it becomes easy to find out the exchange ratio between them. Money helps in calculating relative prices of goods and services.

(c) Standard of deferred payment: It refers to those payments which are to be made in near future. Credit transactions have become the life and blood of modern economic system. Every day, millions of transactions take place in which payments are not made immediately. Money helps and encourages such transactions & helps in capital formation, economic development of the country.

It has facilitated the borrowings and lending activities.
It has lead to the creation of financial institutions.

(d) Store value: Money as a store value means that money is an asset and can be used to store to use in future. One can hold one’s earnings until the time one wants to spend it.

It comes in convenient denomination.
It is easily portable. It requires less space.
It is easily exchanged for goods at all time.

The properties of money are:

(1) Durable: It means that money is durable and can be withstand being used repeatedly.

(2) Divisible: It can divided into smaller units.

(3) Limited in supply: The supply of money is controlled by the government. Nobody other than government can supply the money in the country.

(4) Portable: Money is portable. The individuals can carry it easily wherever they go and transfer it to others.

The official definitions of money supply are given below:

Money supply refers to the official stock of money supplied in a country at a particular point of time. There are some measures of money supply, these are:

M1. Currency in circulation + Demand deposits.

M2. M1. Short term time deposits in the banks & 24-hour money market funds.

M3. M2. Long-term time deposits & money market funds with more than 24-hour maturity.

M4. M3. other deposits.

Economics Concept Introduction

Introduction:

Money: It is generally accepted as a medium of exchange of goods and services.

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

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

Chapter 15, Problem 15.1LO

To determine

Functions of money, properties of money and official definitions of the money supply.

Expert Solution & Answer

Explanation of Solution

There are four functions of money, these are as follows:

(a) Medium of exchange: It means the payment for exchange of goods and services have to be made in terms of money. Goods and services are exchanged for money when people either buy things or sell things.

It solves the problem of double coincidence of wants inherit in barter system.
It facilitates trade and wider its area.
It is essential for conducting transactions in a market economy.

(b) Measure of value: Since money is generally acceptable works as a common denominator in which values of all goods and services are expressed. When the value of a commodity is expressed in terms of money, it is known as single unit (price), it becomes easy to find out the exchange ratio between them. Money helps in calculating relative prices of goods and services.

(c) Standard of deferred payment: It refers to those payments which are to be made in near future. Credit transactions have become the life and blood of modern economic system. Every day, millions of transactions take place in which payments are not made immediately. Money helps and encourages such transactions & helps in capital formation, economic development of the country.

It has facilitated the borrowings and lending activities.
It has lead to the creation of financial institutions.

(d) Store value: Money as a store value means that money is an asset and can be used to store to use in future. One can hold one’s earnings until the time one wants to spend it.

It comes in convenient denomination.
It is easily portable. It requires less space.
It is easily exchanged for goods at all time.

The properties of money are:

(1) Durable: It means that money is durable and can be withstand being used repeatedly.

(2) Divisible: It can divided into smaller units.

(3) Limited in supply: The supply of money is controlled by the government. Nobody other than government can supply the money in the country.

(4) Portable: Money is portable. The individuals can carry it easily wherever they go and transfer it to others.

The official definitions of money supply are given below:

Money supply refers to the official stock of money supplied in a country at a particular point of time. There are some measures of money supply, these are:

M1. Currency in circulation + Demand deposits.

M2. M1. Short term time deposits in the banks & 24-hour money market funds.

M3. M2. Long-term time deposits & money market funds with more than 24-hour maturity.

M4. M3. other deposits.

Economics Concept Introduction

Introduction:

Money: It is generally accepted as a medium of exchange of goods and services.

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

Definition Definition Financial market that deals in securities or assets that are short-term in nature. The money market is responsible for keeping up the liquidity of the businesses and the organizations. These securities are usually held for a period of 12 months or less and are issued by institutions that require cash or funds for their short-term cash flow requirements. The money market is regulated by the federal government.

Chapter 15, Problem 15.1LO

To determine

Functions of money, properties of money and official definitions of the money supply.

Expert Solution & Answer

Explanation of Solution

There are four functions of money, these are as follows:

(a) Medium of exchange: It means the payment for exchange of goods and services have to be made in terms of money. Goods and services are exchanged for money when people either buy things or sell things.

It solves the problem of double coincidence of wants inherit in barter system.
It facilitates trade and wider its area.
It is essential for conducting transactions in a market economy.

(b) Measure of value: Since money is generally acceptable works as a common denominator in which values of all goods and services are expressed. When the value of a commodity is expressed in terms of money, it is known as single unit (price), it becomes easy to find out the exchange ratio between them. Money helps in calculating relative prices of goods and services.

(c) Standard of deferred payment: It refers to those payments which are to be made in near future. Credit transactions have become the life and blood of modern economic system. Every day, millions of transactions take place in which payments are not made immediately. Money helps and encourages such transactions & helps in capital formation, economic development of the country.

It has facilitated the borrowings and lending activities.
It has lead to the creation of financial institutions.

(d) Store value: Money as a store value means that money is an asset and can be used to store to use in future. One can hold one’s earnings until the time one wants to spend it.

It comes in convenient denomination.
It is easily portable. It requires less space.
It is easily exchanged for goods at all time.

The properties of money are:

(1) Durable: It means that money is durable and can be withstand being used repeatedly.

(2) Divisible: It can divided into smaller units.

(3) Limited in supply: The supply of money is controlled by the government. Nobody other than government can supply the money in the country.

(4) Portable: Money is portable. The individuals can carry it easily wherever they go and transfer it to others.

The official definitions of money supply are given below:

Money supply refers to the official stock of money supplied in a country at a particular point of time. There are some measures of money supply, these are:

M1. Currency in circulation + Demand deposits.

M2. M1. Short term time deposits in the banks & 24-hour money market funds.

M3. M2. Long-term time deposits & money market funds with more than 24-hour maturity.

M4. M3. other deposits.

Economics Concept Introduction

Introduction:

Money: It is generally accepted as a medium of exchange of goods and services.

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 15, Problem 15.1LO

To determine

Functions of money, properties of money and official definitions of the money supply.

Expert Solution & Answer

Explanation of Solution

There are four functions of money, these are as follows:

(a) Medium of exchange: It means the payment for exchange of goods and services have to be made in terms of money. Goods and services are exchanged for money when people either buy things or sell things.

It solves the problem of double coincidence of wants inherit in barter system.
It facilitates trade and wider its area.
It is essential for conducting transactions in a market economy.

(b) Measure of value: Since money is generally acceptable works as a common denominator in which values of all goods and services are expressed. When the value of a commodity is expressed in terms of money, it is known as single unit (price), it becomes easy to find out the exchange ratio between them. Money helps in calculating relative prices of goods and services.

(c) Standard of deferred payment: It refers to those payments which are to be made in near future. Credit transactions have become the life and blood of modern economic system. Every day, millions of transactions take place in which payments are not made immediately. Money helps and encourages such transactions & helps in capital formation, economic development of the country.

It has facilitated the borrowings and lending activities.
It has lead to the creation of financial institutions.

(d) Store value: Money as a store value means that money is an asset and can be used to store to use in future. One can hold one’s earnings until the time one wants to spend it.

It comes in convenient denomination.
It is easily portable. It requires less space.
It is easily exchanged for goods at all time.

The properties of money are:

(1) Durable: It means that money is durable and can be withstand being used repeatedly.

(2) Divisible: It can divided into smaller units.

(3) Limited in supply: The supply of money is controlled by the government. Nobody other than government can supply the money in the country.

(4) Portable: Money is portable. The individuals can carry it easily wherever they go and transfer it to others.

The official definitions of money supply are given below:

Money supply refers to the official stock of money supplied in a country at a particular point of time. There are some measures of money supply, these are:

M1. Currency in circulation + Demand deposits.

M2. M1. Short term time deposits in the banks & 24-hour money market funds.

M3. M2. Long-term time deposits & money market funds with more than 24-hour maturity.

M4. M3. other deposits.

Economics Concept Introduction

Introduction:

Money: It is generally accepted as a medium of exchange of goods and services.

Answer 6

Chapter 15, Problem 15.1LO

To determine

Functions of money, properties of money and official definitions of the money supply.

Expert Solution & Answer

Explanation of Solution

There are four functions of money, these are as follows:

(a) Medium of exchange: It means the payment for exchange of goods and services have to be made in terms of money. Goods and services are exchanged for money when people either buy things or sell things.

It solves the problem of double coincidence of wants inherit in barter system.
It facilitates trade and wider its area.
It is essential for conducting transactions in a market economy.

(b) Measure of value: Since money is generally acceptable works as a common denominator in which values of all goods and services are expressed. When the value of a commodity is expressed in terms of money, it is known as single unit (price), it becomes easy to find out the exchange ratio between them. Money helps in calculating relative prices of goods and services.

(c) Standard of deferred payment: It refers to those payments which are to be made in near future. Credit transactions have become the life and blood of modern economic system. Every day, millions of transactions take place in which payments are not made immediately. Money helps and encourages such transactions & helps in capital formation, economic development of the country.

It has facilitated the borrowings and lending activities.
It has lead to the creation of financial institutions.

(d) Store value: Money as a store value means that money is an asset and can be used to store to use in future. One can hold one’s earnings until the time one wants to spend it.

It comes in convenient denomination.
It is easily portable. It requires less space.
It is easily exchanged for goods at all time.

The properties of money are:

(1) Durable: It means that money is durable and can be withstand being used repeatedly.

(2) Divisible: It can divided into smaller units.

(3) Limited in supply: The supply of money is controlled by the government. Nobody other than government can supply the money in the country.

(4) Portable: Money is portable. The individuals can carry it easily wherever they go and transfer it to others.

The official definitions of money supply are given below:

Money supply refers to the official stock of money supplied in a country at a particular point of time. There are some measures of money supply, these are:

M1. Currency in circulation + Demand deposits.

M2. M1. Short term time deposits in the banks & 24-hour money market funds.

M3. M2. Long-term time deposits & money market funds with more than 24-hour maturity.

M4. M3. other deposits.

Economics Concept Introduction

Introduction:

Money: It is generally accepted as a medium of exchange of goods and services.

Answer 7

Chapter 15, Problem 15.1LO

To determine

Functions of money, properties of money and official definitions of the money supply.

Answer 8

Expert Solution & Answer

Explanation of Solution

There are four functions of money, these are as follows:

(a) Medium of exchange: It means the payment for exchange of goods and services have to be made in terms of money. Goods and services are exchanged for money when people either buy things or sell things.

It solves the problem of double coincidence of wants inherit in barter system.
It facilitates trade and wider its area.
It is essential for conducting transactions in a market economy.

(b) Measure of value: Since money is generally acceptable works as a common denominator in which values of all goods and services are expressed. When the value of a commodity is expressed in terms of money, it is known as single unit (price), it becomes easy to find out the exchange ratio between them. Money helps in calculating relative prices of goods and services.

(c) Standard of deferred payment: It refers to those payments which are to be made in near future. Credit transactions have become the life and blood of modern economic system. Every day, millions of transactions take place in which payments are not made immediately. Money helps and encourages such transactions & helps in capital formation, economic development of the country.

It has facilitated the borrowings and lending activities.
It has lead to the creation of financial institutions.

(d) Store value: Money as a store value means that money is an asset and can be used to store to use in future. One can hold one’s earnings until the time one wants to spend it.

It comes in convenient denomination.
It is easily portable. It requires less space.
It is easily exchanged for goods at all time.

The properties of money are:

(1) Durable: It means that money is durable and can be withstand being used repeatedly.

(2) Divisible: It can divided into smaller units.

(3) Limited in supply: The supply of money is controlled by the government. Nobody other than government can supply the money in the country.

(4) Portable: Money is portable. The individuals can carry it easily wherever they go and transfer it to others.

The official definitions of money supply are given below:

Money supply refers to the official stock of money supplied in a country at a particular point of time. There are some measures of money supply, these are:

M1. Currency in circulation + Demand deposits.

M2. M1. Short term time deposits in the banks & 24-hour money market funds.

M3. M2. Long-term time deposits & money market funds with more than 24-hour maturity.

M4. M3. other deposits.