Question

Question 6 1 pts

Money eliminates the need for the double coincidence of wants through its use as a

Group of answer choices

unit of account

store of value

medium of exchange

standard of value

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Question 7 1 pts

In the United States, the basic money supply (M1) is primarily comprised of

Group of answer choices

coins, "paper" currency, checkable deposits, & short-term government debt

coins, "paper" currency & checkable deposits

a commodity

worthless pieces of "paper", thanks to the Federal Reserve System

"near-monies"

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Question 8 1 pts

Keynes' important contribution to the concept of money demand was (hint: see question #10)

Group of answer choices

he really didn't make any important contribution

the development of the various definitions of money (M1, M2, etc.)

an emphasis on the possibility that the public might wish to hold money as a "store of wealth" or an asset

the "transactions demand" for money

that there is an inverse relationship between the value of money and the price level

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Question 9 1 pts

The demand for money function put together in class is formally known as

Group of answer choices

the classical demand for real cash balances

what demand for money function?

the liquidity preference demand for money function

the alcohol preference for money function

the transactions demand for money function

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Question 10 1 pts

The transactions demand (D_t) for money is most closely related to money functioning as a

Group of answer choices

store of value (or wealth)

unit of account

medium of exchange

measure of value

Answer 1

Answer-1) Correct option is 'C'

Money eliminates the need for the double coincidence of wants through its use as a medium of exchange. Money effectively eliminates the double coincidence of wants problem by serving as a medium of exchange that is accepted in all transactions.

Answer-2) Correct option is 'B'

In the United States, the basic money supply (M1) is primarily comprised of coins, "paper" currency & checkable deposits. The M₁ money supply is a measurment of the total amount of currency in circulation. It includes, M₁ = Coins and currency in circulation + Checkable (demand) deposit + Traveler's checks.

Answer-3) Correct option is 'E'

Keynes' important contribution to the concept of money demand was that there is an inverse relationship between the value of money and the price level. The speculative motive giving rise to the speculative demand for money is the most important contribution keynes made to the theory of demand for money. When the price level rises the value of money falls.

Answer-4) Correct option is 'E'

The demand for money function put together in class is formally known as the transactions demand for money function. The transaction of money measures how how much of a certain currency of people need in order to buy the goods and services they use. The demand for money is a function of price and income. Income rises demand for money rises.

Answer-5) Correct option is 'C'

The transactions demand (D_t) for money is most closely related to money functioning as a medium of exchange. A medium of exchange is an intermediary instrument or system used to facilitate the sale, purchase, or trade of goods between parties.