Federal Reserve Project Pt. 2
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A marketing exchange is what happens any time two or more people trade goods or services.
What is money?
There are three types of money recognized by economists - commodity money, representative money, and finally, flat money.
What money do we use in the United States?
There are three types of money in the economy, but as members of the public, we will have only ever used two of them – cash, and the numbers in a bank account.
What are the characteristics of each type of money?
Commodity money is money whose value comes from a commodity of which it is made. Representative money is a certificate or token that can be exchanged for the underlying commodity. Fiat money is money that does not have intrinsic value and does not represent an asset in a vault somewhere.
What function does money serve in the economy?
Money serves three functions within the economy. 1. Medium of exchange 2. Unit of account 3. Store of value
How has the abandonment of the gold standard affected the US dollar?
The dollar we use today is worth less than two dimes in buying power compared with the pre-Nixon (gold standard) dollar. That implies that median family income today would be about $70,000, or nearly 50% higher than it is today!
Money is a powerful tool that can make or break the economy.
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