by mlua1

Bookmark and Share

Front Back
What is Barter
Barter is the direct exchange of one good or service for another good or service, rather than fo money.
NOTE: The use of money simplifies and therefore increases market transactions. Money also prevents wasting time that can be devoted to production possibilities.
What is money?
and no the answer is not paper to buy stuff :)
Money is anything that serces as a medium of exchange, unit of account, and store of value. (to be explained in upcoming cards)
Note that "Anything" meeting the three tests is a condidate to serve as money. This explains why . . . (look at back)
This explains why precious metals, beaverskins and cigarettes have all served as money
Note that Barter in a simple society is a way for participants to exchange goods and services in order to satisfy wants, however .....
barter requires wasting time in the process of exchange that people could use for productive work.
If the goal is to increase the volume of transactions and live in a modern economy, the most important function of money is to serve as a medium of exchange, but whst is a medium of exchange? . . . . .
A medium of exchange is the primary function of money to be widely accepted in exchange for goods and services.
Money serves as a unit of account. so what does this mean . . . .
a unit of account is the function of money to provide a common measurement of the relative value fo goods and services.
Money serves as a store of value in exchange for some intem in the future
Store of Value is the ability of money to hold value over time.
Note: Money is a useful mechanism for transforming income in the present into future purchases
The key property of money is that is is completely liguid, this means that ....
This means that money is immediately available to spend in exchange for goods and services without any additional expense
Note: Money is the most liquid form of wealth because it can be spent directly in the marketplace
Are credit cards money?
Let's test credit cards fo the 3 functions of money. First, because credit cards are widely accepted, they serve as a means of payment in an exchange for goods and services. Second, the credit card statement and not the card itself serves as a unit of amount. but credit cards clearly fail to meet the store-of-value criterion and are therefore not money.
Note that all flashcards have been derived directlry from a book titled Macroeconomics for Today
6th Edition
By Tucker, they are not my own. (just wanted to give proper credit because plagerism is not good)
x of y cards