Master this deck with 19 terms through effective study methods.
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Store of value, unit of account, medium of exchange.
It erodes purchasing power and makes prices unreliable.
Has intrinsic value regardless of its use as money.
Fiat money has no intrinsic value and relies on trust.
Extremely rapid inflation that destroys a currency's value.
Assets that store value but cannot be used directly for transactions.
The relationship between money supply, velocity, price level, and real output.
The narrowest definition of money supply, including cash and demand deposits.
M2 includes all of M1 plus savings deposits and small time deposits.
To provide a stable currency and act as a lender of last resort.
Maximum employment and price stability.
It sets monetary policy and determines the federal funds rate target.
Currency in circulation counts in M1; bank reserves do not.
It limited the money supply and reduced flexibility in economic crises.
Currency that must be accepted for payment of debts by law.
Prices must rise, leading to inflation.
Cash is the most liquid asset.
It is generally accepted in trade due to social convention.
It destroys cash's ability to maintain purchasing power.