What does it mean to say that money serves as a store of value?
A store of value is the function of an asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved. Money is one of the best stores of value because of its liquidity, that is, it can easily be exchanged for other goods and services.
When money serves as a unit of account What does it mean that money acts as?
Money serves as a unit of account, which means that it is the ruler by which other values are measured. Money serves as a medium of exchange, which means that money acts as an intermediary between the buyer and the seller.
What is medium of exchange quizlet?
medium of exchange. anything that is used to determine value during the exchage of goods and services; buying food with a money. barter. the direct exchage of one set of goods or sevices for another.
What does it mean when economists say that home buyers are underwater on their mortgages?
bundling groups of loans, bonds, mortgages, and other financial debts into new securities. What does it mean when economists say that home buyers are “underwater” on their mortgages? Buyers owe more on their mortgage than the properties are worth.
What is a good store of value?
A store of value is an asset that maintains its value, rather than depreciating. Gold and other precious metals are good stores of value because their shelf lives are essentially perpetual. A nation’s currency must be a reasonable store of value for its economy to function smoothly.
Which of these is an advantage of money as a store of value?
It has an advantage over other stores of value, such as real estate, stocks or bonds, because it can be immediately spent, while the other assets need to be converted to cash before being exchanged for something else.
What are the measures of money supply in the economy?
There are several standard measures of the money supply, including the monetary base, M1, and M2. The monetary base: the sum of currency in circulation and reserve balances (deposits held by banks and other depository institutions in their accounts at the Federal Reserve).
What are the four functions that money serves?
whatever serves society in four functions: as a medium of exchange, a store of value, a unit of account, and a standard of deferred payment.
What are the six main characteristics of money?
The characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability.
What is medium of exchange example?
Money is used as a medium of exchange because both the buyer and the seller understand the value. This is beneficial because neither party is confused about its worth. For example, if one were to offer a cow as payment for a meal at McDonald’s, there may be some confusion about the value of the cow.
Why is money a medium of exchange?
Money is a medium exchange because buyers and sellers agree to its common value. Money can lose its value during periods of hyperinflation, when too much money is dumped into an economy.
What is anything that is customarily used as a medium of exchange?
money. anything customarily used as a medium of exchange, a unit of accounting, and a store of value. medium of exchange. use of money in exchange for goods or services. barter.
What happens if your home value drops?
A decrease in value can impact your ability to refinance your property. This is problematic for owners that have adjustable rate loans that they want to lock by refinancing into a fixed rate loan, since it could prevent them from having enough equity to qualify.
What happens if the value of my house goes down?
If the value of your home drops, making the amount of your mortgage higher than the actual value of the property, you are considered to have an “upside down mortgage”. The decline in value of your home does not release you from the responsibility to pay the loan.
What do you do if your house is underwater?
What Are Your Options if Your Mortgage Is Underwater?
- Option 1: Stay in your home and work to build more equity.
- Option 2: Refinance your mortgage.
- Option 3: Sell your house and use your savings to pay the amount you still owe.
- Option 4: Sell your home through a short sale process.
- Option 5: Foreclose on your home.