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| Question | Answer |
| Money | Is a commodity or token that is accepted as a means of payment |
| What three things are included in the definition of Money | 1. Commodity or Token 2. Generally Accepted 3. Means of Payment |
| Commodity or Token (Money) | A commodity is something we give value too. Ex. Gold, Milk. A token is made from something that doesn't have value but is given value |
| What does money have to do and how recognizable should it be | Money has to be recognizable and divisible |
| Generally Accepted (Money) | It means that it can be used to buy anything and everything |
| Means Of Payment (Money) | Is the method of settling debt. When a payment is made the deal is complete |
| What are the three vital Functions of Money | 1. Medium Exchange 2. Unit of Account 3. Store Value |
| Medium of Exchange (Function) | Is an object that is generally accepted in return for goods and services. Money is a medium of exchange. |
| What is barter and Double Coincidence of Wants | Bartering is trading of goods and services. DCW is when the person your trading with needs to want what you have and V.V. |
| Unit of Account (Function) | Is an agreed upon measure for stating the prices of goods and services |
| Store Value (Function) | Any commodity or token that can be held and exchanged later for goods or services. Money is Store Value because we use it to buy things |
| What is most money in the world | Fiat Money |
| Fiat Money | It is objects that are money because the law decrees or orders them to be money |
| Fiat Money consists of what two things | 1. Currency 2. Deposits at banks and other financial institutions |
| Currency | It is physical money like notes and coins |
| Deposits | Deposits at banks, credit unions, saving banks are money. They are money because they can be used to make payments |
| What are the official measure of money | M1 and M2 |
| Currency inside banks is money? T or F | F. Money inside banks is not money because they are not available as a form for payment |
| M1 | Consists of currency held by businesses and individuals, Traveler's checks, and checkable deposits owned by individuals or businesses |
| M2 | M1+ Saving Deposits, time deposits, money market funds and other deposits |
| What is like Glacials and Interglacials | Money because the more there is in savings (Ice Caps/Glaciers) the less money (Water) there is and V.V. |
| What is not money | 1. Checks 2. Credit Cards 3. Debit Cards 4. e-Checks |
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