Question

1- When the American dollar worth more in relation to currencies of other countries, would an American be more likely to buy American-made or foreign-made jeans?

2- Define money and explain the important functions of money?

3- When interest rates fall, how might you change your economic behavior?

Answer 1

1.when american dollar is worth more in telation to other countries of the world,then americans will buy foreign-made jeans because a strong american currency would make imports cheaper.

2.money is the medium of exchange.

Functions of money

Money has various functions.the most important function of money is that,it acts as a medium of exchange for buying and selling goods and services.money is used as a store of value,it means money can be saved in banks,saved as stock in stock market or in the form of bonds and securities.money is the unit of account.different accounts can be maintained on the basis of money.foreign exchange can be calculated on the basis of money currencies.money can be used as standard deferred payment means if someone has to pay money to someone in the future,that would be determined on the basis of value of money.

3.when interest rate falls,I will take more loan from bank,buy house,car.I would increase spending by taking loan.