Question 1 Match the feature of money to the example of its application. medium
ID: 1211351 • Letter: Q
Question
Question 1
Match the feature of money to the example of its application.
medium of exchange
long-term store of value
standard of value
liquidity
As workers reach their prime earning years of their careers, they typically save for when they will not be as productive.
How much electricity someone will want to purchase depends upon the electric rate.
Barter is not necessary when money is there to play this critical role
M1 is the best form of money for the purpose of spending.
With an initial increase in excess reserves within the banking system of $100 million and a required reserve ratio of .20, the money supply could expand by as much as $___million. [Answer with a whole number only]
medium of exchange
long-term store of value
standard of value
liquidity
A.As workers reach their prime earning years of their careers, they typically save for when they will not be as productive.
B.How much electricity someone will want to purchase depends upon the electric rate.
C.Barter is not necessary when money is there to play this critical role
D.M1 is the best form of money for the purpose of spending.
Explanation / Answer
Medium of exchange-barter is not necessary when money is there to play this critical role
Long term store of value - as workers reaches their prime earning years of their careers,they typically save for when they will not be as productive.
Standard of value- how much of electricity someone will want to purchase depends upon the electric rate.
Liquidity - m1 is the best form of money for the purpose of spending.
Q.2.ans.money multiplier = 1/required reserve ratio = 1/0.20 = 20
Now actual money supply change = initial change in excess reserve * money multiplier = 100 million*20 = 2000 million
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