Flashcard Set Preview
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| 1 |
name the three functions of money
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measure of value, store of value, medium of exchange
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| 2 |
what is the purpose of the store of value?
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holds value. can be saed as needed.
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| 3 |
what is the purpose of the measure of value?
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a common denominator that expresses worth in words, like a price tag on a sweater
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| 4 |
what is the purpose of money being a medium of exchange?
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something excepted by the general population as an exchange/ payment for goods or services.
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| 5 |
list the four characteristics needed to make money an effective medium of exchange.
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portability,durability, divisibility,limited availability
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| 6 |
describe why portability is an important characteristic of the medium of exchange
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it needs to be easily transported
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| 7 |
describe why durability is an important characteristic of the medium of exchange
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needs to be able to hold up to most conditions like rain and everyday accidents
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| 8 |
describe why divisability is an important characteristic of the medium of exchange
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so that people are able to break it down and use only as much as needed
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| 9 |
describe why limited availability is an important characteristic of the medium of exchange
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it needs to be able to retain value. if theres too much in circulation, the dollar slowly loses...
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| 10 |
what is the monetary standard used by the fed reserve?
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the dollar bill.
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| 11 |
what is the federal reserve responsible for?
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preserving the integrity of the monetary standard, or the dollar bill.
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| 12 |
name the 3 major economic systems
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capitalism, socialism, and communism
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| 13 |
briefly describe capitalism
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only allow gvt. a limited role in economy and all productive resources are privately owned...
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| 14 |
briefly describe socialism
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the gvt acts as a guiding light for its countries key decisions and its basic productive resorces...
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| 15 |
briefly describe communism
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central gvt that influences any and every economic decison. the government owns and controls...
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