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 Flag this Question 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” Flag this Question 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 Flag this Question 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 Flag this Question Question 10 1 pts The transactions demand (Dt) 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
AnswerAnswer 1) ‘MEDIUM OF EXCHANGE ‘ option is correct . DOUBLE COINCIDENCE OF WANTS : Double coincidence of wants is a major characteristic of barter system of exchange . It implies that at a point of time , the two individuals are in possession of such goods which they are willing to exchange for the satisfaction of their wants . But it is not always simple to find a person who wants your good and at the same time, possess that good which you want to buy . That’s why in barter system , exchange remain limited . But with emergence of money as a MEDIUM OF EXCHANGE the problem of double coincidence of wants has vanished . Money acts as a medium for sale and purchase of goods and services . Note : All other options are incorrect because money as store , standard and unit can’t solve the problem of sale and purchase in barter .
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