What Makes Money Important?

Front

Why is money considered a Medium of Exchange?

Back

It is accepted for buying and selling of goods and services.

Front

Money acts as a store of value, meaning it maintains wealth over time. If you work today, you can get paid in money and wait to spend it in the future.

Back

It maintains wealth over time because money can be saved and spent in future.

Front

How does money serve as a measure of value?

Back

It provides a common standard to compare prices

Front

Inflation

Back

An overall increase in the price level

Front

Inflation usually coincides with an increase in what?

Back

Cost of living

Front

What is deflation identified as?

Back

Continuous falling prices/wages for well over a year

Front

Deflation is usually caused by a sustained decrease in _______.

Back

wages

Front

What does deflation result in?

Back

Sustained decrease in average prices of all goods and services

Front

Deflation is usually accompanied by sustained periods of falling production, unemployment, and limited _______.

Back

capital investment (wealth)

Front

What does 'M' indicate in the equation MV=PQ?

Back

Money supply