The correct example of bartering is:
Sarah trades her apple for Ava's bag of chips.
Bartering involves exchanging goods or services directly without the use of money.
Sarah has an apple and Ava has a bag of chips. Sarah would rather consume the bag of chips, and Ava would prefer to consume the apple. Which of the following is an example of bartering?(1 point)
Responses
Sarah and Ava consume the goods they currently possess.
Sarah and Ava consume the goods they currently possess.
Sarah trades her apple for Ava's bag of chips.
Sarah trades her apple for Ava's bag of chips.
Ava pays Sarah $1 for her apple.
Ava pays Sarah $1 for her apple.
Sarah pays Ava $1 for her bag of chips.
11 answers
Gold has historically functioned as money. This is due, in part, to the willingness of others to accept it as valid payment for goods and services. In this case, gold is functioning as a(n)(1 point)
Responses
unit of account.
unit of account.
store of value.
store of value.
medium of exchange.
medium of exchange.
fiat money.
fiat money.
Responses
unit of account.
unit of account.
store of value.
store of value.
medium of exchange.
medium of exchange.
fiat money.
fiat money.
In the context described, gold is functioning as a medium of exchange.
A medium of exchange is something that is widely accepted as a method of payment for goods and services.
Consider a hypothetical economy in which rice functions as money. In addition to being valued as money, rice is valued as a consumer good. In this scenario, rice is said to be(1 point)
Responses
representative money.
representative money.
currency.
currency.
commodity money.
commodity money.
fiat money.
Responses
representative money.
representative money.
currency.
currency.
commodity money.
commodity money.
fiat money.
In this scenario, rice is said to be commodity money.
Commodity money is a type of money that has intrinsic value, meaning it is valued both as a medium of exchange and as a consumer good.
Elementary school students often trade food items at lunch in an effort to have the best lunch possible. In one elementary school, pudding cups have become so popular that they have become a unit of account. This means that(1 point)
Responses
a pudding cup entitles its holder to a share of some valuable asset.
a pudding cup entitles its holder to a share of some valuable asset.
a pudding cup will likely have the same purchasing power tomorrow as it does today.
a pudding cup will likely have the same purchasing power tomorrow as it does today.
the price of other lunch items is expressed in quantities of pudding cups.
the price of other lunch items is expressed in quantities of pudding cups.
students are eager to accept pudding cups in exchange for any lunch item.
Responses
a pudding cup entitles its holder to a share of some valuable asset.
a pudding cup entitles its holder to a share of some valuable asset.
a pudding cup will likely have the same purchasing power tomorrow as it does today.
a pudding cup will likely have the same purchasing power tomorrow as it does today.
the price of other lunch items is expressed in quantities of pudding cups.
the price of other lunch items is expressed in quantities of pudding cups.
students are eager to accept pudding cups in exchange for any lunch item.
The correct response is:
the price of other lunch items is expressed in quantities of pudding cups.
When something serves as a unit of account, it means that it is used as a standard measure to value other goods and services, allowing prices to be expressed in terms of that item.
Which of the following illustrates the difference between the U.S. dollar, a form of fiat money, and a U.S. gold certificate, a representative currency?(1 point)
Responses
A gold certificate does not have value in addition to its value as money.
A gold certificate does not have value in addition to its value as money.
A U.S. dollar does not have value in addition to its value as money.
A U.S. dollar does not have value in addition to its value as money.
A gold certificate does not represent a claim to some specific asset.
A gold certificate does not represent a claim to some specific asset.
A U.S. dollar does not represent a claim to some specific asset.
Responses
A gold certificate does not have value in addition to its value as money.
A gold certificate does not have value in addition to its value as money.
A U.S. dollar does not have value in addition to its value as money.
A U.S. dollar does not have value in addition to its value as money.
A gold certificate does not represent a claim to some specific asset.
A gold certificate does not represent a claim to some specific asset.
A U.S. dollar does not represent a claim to some specific asset.
The correct response is:
A U.S. dollar does not represent a claim to some specific asset.
This illustrates the difference because a U.S. dollar is based on fiat money and does not have intrinsic value or represent a claim to a physical commodity (like gold). In contrast, a gold certificate is a form of representative currency that does represent a claim to a specific amount of gold.
Which of the following answers applies to a form of fiat money and not a form of representative currency?(1 point)
Responses
Does not derive its value from government regulation.
Does not derive its value from government regulation.
Can't be controlled by the government.
Can't be controlled by the government.
Does not represent a claim to some specific asset.
Does not represent a claim to some specific asset.
Is not widely accepted as a method of payment because it can be redeemed everywhere.
Responses
Does not derive its value from government regulation.
Does not derive its value from government regulation.
Can't be controlled by the government.
Can't be controlled by the government.
Does not represent a claim to some specific asset.
Does not represent a claim to some specific asset.
Is not widely accepted as a method of payment because it can be redeemed everywhere.
The correct response is:
Does not represent a claim to some specific asset.
Fiat money does not represent a claim to any specific asset and derives its value largely from the trust and confidence of the people who use it. In contrast, representative currency represents a claim to a physical asset, such as gold or silver.
1 answer