Discuss three major points about what gives money its value.
What will be an ideal response?
First, currency and demand deposits (M1 definition) are considered money because these items are accepted as payment for goods and services. Money must be acceptable to serve its function as a medium of exchange. Second, the government mandates through law that paper money be accepted as payment for debts. While checks are not mandated by law as money, government agencies do back demand deposits at banks with deposit insurance that helps to maintain the acceptability of this form of money. Third, money is relatively scarce. There is a reasonably constant demand for money for transactions purposes and future uses. The supply of money will determine the value or “purchasing power” of each unit of money. The supply of money is controlled by monetary institutions (the Federal Reserve System) that attempt to maintain a reasonably stable purchasing power for money.
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On the graph above, output is above planned expenditures at point ________
A) A B) B C) G D) H E) none of the above
If two persons trade, one must gain at the expense of the other
a. True b. False Indicate whether the statement is true or false
Why is the distinction between fixed and variable cost important?
Please provide the best answer for the statement.
If NASCAR makes a business decision in favor of one track rather than another, based upon the fact that the track it chooses is owned by the same family who owns NASCAR, rather than the overall profitability of the chosen track, economists will insist that
A. monopoly does not really govern auto racing. B. this is what happens when there is significant economic competition in racing. C. competition will quickly lead to NASCAR's demise. D. this is simply a consequence of the family's monopoly power.