Explanation There are mainly three functions for money. The main functions of money are as follows: Medium of exchange: The money is the important item which facilitates the trade and exchange in the economy. The buyers will accept only money in return to the goods and services that they sell in the market and the consumers will only provide money for the goods and services from the market. It helps to avoid the necessity of double coincidence of wants which leads to the decline the barter system. The producers will be willing to offer the product for money and they can use money for demanding the commodities that they need. Thus, the prime most function of money is the medium of exchange...

Identify the functions of money.

Macroeconomics

10th Edition

ISBN: 9781319105990

Author: Mankiw, N. Gregory.

Publisher: Worth Publishers,

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IS-LM-PC Analysis

The IS (Investment Saving), LM (Liquidity Preference- Money Supply), and PC (Philips Curve) is the model that looks at the dynamics of output and inflation. It takes into account the central bank policy decision to adjust the inflation and real interest …

IS-LM Analysis

The term IS stands for Investment, Savings, and LM stands for Liquidity Preference, Money Supply. Therefore, the term IS-LM model is known as Investment Savings – Liquidity preference money Supply. This model was introduced by a Keynesian macroeconomic t…

Question

Chapter 4, Problem 1QR

To determine

Identify the functions of money.

Expert Solution & Answer

Similar questions

Can you name some item that is a store of value, but does not serve the other functions of money?
What is the basic quantity equation of money?

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