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Without money, price tags would have to specify exactly what option are available b/w every barterer. Study with Quizlet and memorize flashcards containing terms like Three functions of money, Medium of Exchange, Store of Value and more.
thinking at the margin. when you decide how much more or less to do. cost/benefit analysis. the decision making process. marginal cost. the extra cost of adding one more unit. Study with Quizlet and memorize flashcards containing terms like economics, shortage, entrepreneurs and more.
Phrase that describes the cost of decision-making and consumption. Things that appear free always have some hidden cost.
Diagram showing the real and money flows between households and businesses in output or product, markets and input or resource markets
The circular flow model highlights the “flows” within the economy—the flow of economic resources, goods and services, and the flow of money. To demonstrate the usefulness of the circular flow model, let’s follow a few dollars through a cycle.
In an economy with inflation, money loses some buying power each year, but it remains money. Third, money serves as a unit of account , which means that it is the ruler by which we measure values. For example, an accountant may charge $100 to file your tax return.
Define money and discuss its three basic functions. Distinguish between commodity money and fiat money, giving examples of each. Define what is meant by the money supply and tell what is included in the Federal Reserve System’s two definitions of it (M1 and M2).
