Quiz 3 b - Quiz PDF

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EC 340, Quiz 3 Name ____________________

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1. (1 point) To an economist, _____________ is anything that is generally accepted in payment for goods and services or in the repayment of debt. 2. (1 point) Of money's three functions, the one that distinguishes money from other assets is its function as a medium of exchange. This is because money is the _______________(most or least) liquid asset. 3. (1 point) _________________________(Barter economy or Money economy) allow people to specialize in what they do best by reducing transaction costs. 4. (1 point) Kevin purchasing concert tickets with his debit card is an example of the ______________________(unit of account, store of value, or medium of exchange) function of money. 5. (1 point) ____________________ is the relative ease and speed with which an asset can be converted into a medium of exchange. 6. (1 point) Reducing transactions costs of selling an asset make the asset ______________(more or less) liquid. 7. (2 point) During ________________(disinflation, deflation, or hyperinflation) in which the inflation rate exceeds 50% per month, money no longer functions as a good store of value and people may resort to ______________(barter or money) economy. 8. (1 point) Paper currency that has been declared legal tender but is NOT convertible into coins or precious metals is called ________________(commodity or fiat) money. 9. (1 point) M1 includes _____________(bigger or smaller) number of assets than M2. answer 1. money 2. most 3. Money economy 4. medium of exchange 5. liquidity 6. more 7. hyperinflation; barter 8. fiat 9. smaller...