D089 - Module 9 - Stabilization Policies
Questions Answers
Medium of Exchange Money is used as a method of payment for goods and services.
Store of value People use money to preserve purchasing power from the present to the
future.
Unit of account Money is used to measure and compare the values of goods and services.
Standard of deferred payment Loans and future agreements are stated in monetary terms.
List the characteristics of Durable, divisible, portable, and resistant to counterfeiting
successful currencies.
, An item that is used as money but Commodity money
has value in a different use. Eg/
Gold
Money that is declared by the Fiat Money
government to be legal tender
Currency + Checkable Deposits + M1
Traveler's Checks
M1 + Savings + Money market funds M2
The central bank in the United States Federal Reserve
Conducting monetary policy, regulating financial institutions,
What are the responsibilities of the
providing banking services to depository institutions, and promoting
FED?
financial stability.
fractional reserve banking system banks keep a fraction of deposits as reserves and use the rest to make loans
Who controls monetary policy at the Federal Open Market Committee (FOMC)
Fed?
What function of money is this? Medium of Exchange
Buying a car with cash.
What function of money is this? Unit of Account
Comparing car prices.
What function of money is this? Store of Value
Savings for a car.
What function of money is this? Standard of deferred payment
Borrowing to purchase a car.
In the U.S., who is responsible for Congress and the president
fiscal policy?
The use of government spending Fiscal policy
and taxes to stabilize the
economy.
Questions Answers
Medium of Exchange Money is used as a method of payment for goods and services.
Store of value People use money to preserve purchasing power from the present to the
future.
Unit of account Money is used to measure and compare the values of goods and services.
Standard of deferred payment Loans and future agreements are stated in monetary terms.
List the characteristics of Durable, divisible, portable, and resistant to counterfeiting
successful currencies.
, An item that is used as money but Commodity money
has value in a different use. Eg/
Gold
Money that is declared by the Fiat Money
government to be legal tender
Currency + Checkable Deposits + M1
Traveler's Checks
M1 + Savings + Money market funds M2
The central bank in the United States Federal Reserve
Conducting monetary policy, regulating financial institutions,
What are the responsibilities of the
providing banking services to depository institutions, and promoting
FED?
financial stability.
fractional reserve banking system banks keep a fraction of deposits as reserves and use the rest to make loans
Who controls monetary policy at the Federal Open Market Committee (FOMC)
Fed?
What function of money is this? Medium of Exchange
Buying a car with cash.
What function of money is this? Unit of Account
Comparing car prices.
What function of money is this? Store of Value
Savings for a car.
What function of money is this? Standard of deferred payment
Borrowing to purchase a car.
In the U.S., who is responsible for Congress and the president
fiscal policy?
The use of government spending Fiscal policy
and taxes to stabilize the
economy.
