4B-Money and Monetary Policy

Which function of money encourages people to save money?

• Medium of Exchange
• Store of Value
• Unit of Account
• Acceptability

Money must be easy to carry. 

• Durability
• Divisibility
• Store of Value
• Portability

Money that has value because the Government declared that it is money.

• Fiat Money
• Commodity Money
• Currency
• Coins

Money must be widely recognized by both parties before an exchange for goods or services happens.

• Divisibility

• Acceptability

• Limited Supply

• Store of Value

Money must be scarce.

• Limited Supply
• Medium of Exchange
• Store of Value
• Fiat Money

Money that has a value as something other than money.

• Fiat Money

• Commodity Money

• Currency

• Coins

Money must be easily divided into small parts so that people can purchase goods and  services at any price.

• Divisibility
• Uniformity
• Acceptability
• Durability

Money must be able to withstand the wear and tear of many people using it.

• Divisibility

• Durability

• Limited Supply

• Acceptability

Trade is made easier because of this function of money that eliminates the need to barter (trade goods for goods).

• Store of Value
• Medium of Exchange
• Unit of Account
• Divisibility

Trading for things with other goods is called

• money

• stealing

• bartering

• negotiating