Functions and Characteristics of Money 1

Front

What's the money-related problem that prevents a deal when trading an old Dell computer for a fish tank?

Back

double coincidence of wants

Front

What characteristic of money is displayed with the transaction of buying a fiesta size bag of Takis at Vons and receiving change?

Back

divisibility

Front

You drive your new Lamborghini off the lot and suddenly it is worth less than you paid for it. A properly managed currency doesn't have this problem because it is a...

Back

store of value

Front

Which function of money "reduces the transaction costs between buyers and sellers"?

Back

medium of exchange

Front

What's the problem with using rice as money?

Back

store of value

Front

What's the problem with using 5 pound iron bricks as money?

Back

portability

Front

Inflation--if not controlled--can erode this function of money.

Back

store of value

Front

What function of money is needed when a salesperson quotes a price in terms of "6 cows or 9 TVs"?

Back

unit of account

Front

In American prisons, ramen noodles are traded for other goods and services. In this sense, Ramen serves as a...

Back

medium of exchange

Front

When you use the cash in your wallet to buy the $6 lunch special at Denny's, money is serving which functions?

Back

medium of exchange and unit of account