Chapter 3: What is Money?

To an economist, ________ is anything that is generally accepted in payment for goods and services or in the repayment of debt.

• wealth

• income

• money

• credit

Money is

• anything that is generally accepted in payment for goods and services or in the repayment of debt.

• a flow of earnings per unit of time.

• the total collection of pieces of property that are a store of value.

• always based on a precious metal like gold or silver.

Currency includes

• paper money and coins.

• paper money, coins, and checks.

• paper money and checks.

• paper money, coins, checks, and savings deposits.

Even economists have no single, precise definition of money because

• money supply statistics are a state secret.

• the Federal Reserve does not employ or report different measures of the money supply.

• the ʺmoneynessʺ or liquidity of an asset is a matter of degree.

• economists find disagreement interesting and refuse to agree for ideological reasons.

The total collection of pieces of property that serve to store value is a person's

• wealth.

• income.

• money.

• credit.

A person's house is part of her

• money.

• income.

• liabilities.

• wealth.

________ is used to make purchases while ________ is the total collection of pieces of property that serve to store value.

• Money; income

• Wealth; income

• Income; money

• Money; wealth

________ is a flow of earnings per unit of time.

• Income

• Money

• Wealth

• Currency

An individual's annual salary is her

• money.

• income.

• wealth.

• liabilities.

When we say that money is a stock variable, we mean that

• the quantity of money is measured at a given point in time.

• we must attach a time period to the measure.

• it is sold in the equity market.

• money never loses purchasing power.