What are the functions of money?
What will be an ideal response?
Money serves as a medium of exchange, which means it is accepted as payment. It serves as a unit of account in which prices are expressed. It also serves as a store of value and as a standard of deferred payment.
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Targeting the federal funds rate allows the Fed some ability to control bank reserves and thus the money supply. Explain how each of the following tools allows the Fed to fine-tune its control of bank reserves
a. Conducting open market operations b. Changing the discount rate c. The ability to pay interest on reserves d. The Term Deposit Facility
Under a _____, the assets of two firms that operate in the same market are put under a single ownership
a. vertical merger b. horizontal merger c. vertical acquisition d. horizontal acquisition
Aggregate demand shifts left if
a. government purchases increase and shifts left if stock prices rise. b. government purchases increase and shifts left if stock prices fall. c. government purchases decrease and shifts left if stock prices rise. d. government purchases decrease and shifts left is stock prices fall.
The quantity theory of money assumes that velocity is approximately constant resulting in nominal GDP to be proportional to the money stock.
Answer the following statement true (T) or false (F)