Question

1. What is money and how is it classified?

2. What is the money?

3. What does the Federal Reserve do? How is money affect by the Federal Reserve?

Answer 1

1.Money of account is “that in which debts and prices and general purchasing power are expressed. It is that form of money in terms of which the accounts of a country are kept and transactions made.” The monetary unit in which the money of account is expressed may not exactly be a circulating medium.

Generally speaking, money of account and actual money are not different. At certain unusual time they might, however, be different. For instance, during the hyper-inflation of 1920’s in Germany, all payments were made in terms of German Marks. But the money of account changed tot eh US dollar or Swiss franc because of relative stability in their value.

2.a current medium of exchange in the form of coins and banknotes; coins and banknotes collectively.

3.The Federal Reserve System, also known as "The Fed," is America's central bank.1 That makes it the most powerful single actor in the U.S. economy and thus the world. It is so complicated that some consider it a "secret society" that controls the world's money. They’re partly right. Central banks do manage the money supply around the globe, but there is nothing secret about it.