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GOLD STANDARD: Use of gold as the standard for valuing a nation's currency. A gold standard can take at least three different forms, most of which have been part of the American economic landscape. (1) Gold is used as the money in circulation. (2) Gold is used to back up paper money in circulation. This involves the use of something like a gold certificate, such that the number of certificates in circulation is the same as the amount of gold stored someplace like Fort Knox. (3) Gold is used to fix the exchange price of paper currency in circulation. In this case, the currency could, in principle, be exchanged for some predetermined amount of gold. In other words, the price of gold is fixed in terms of dollars.
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Lesson 17: Money | Unit 2: More About Money
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Page: 5 of 25
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Topic:
Medium of Exchange
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The primary function of money is to as THE medium of exchange. An economy without money: - Barter exchange happens when you trade one good for another.
- A barter economy is one that uses nothing but barter trades, no money.
- Barter requires double coincidence of wants: I must want what you have and you must want what I have.
- With no money, resources are used for trading and not for production.
The bottom line: - Using money as a medium of exchange eases the exchange process, makes it more efficient, and frees resources for production.
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MACROECONOMIC MARKETS Three sets of markets that make up the macroeconomy--product, financial, and resource--which exchange the three primary types of macroeconomic commodities--gross production, legal claims, and factor services. The four macroeconomic sectors--household, business, government, and foreign--interact through these three sets of markets. The primary objective of macroeconomic theories is to explain activity that takes place in these three sets of markets.
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A U.S. dime has 118 groves around its edge, one fewer than a U.S. quarter.
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"Plans are only good intentions unless they immediately degenerate into hard work." -- Peter Drucker, management consultant
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TVC
Total Variable Cost
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