List and describe the three functions of money
Money serves as a medium of exchange, a unit of account and a store of value. Medium of exchange: In a money economy, money serves as the medium through which transactions are made. Unit of account: Money is the common standard by which value is determined in a money economy (a "yardstick" of value). Store of value: Money will retain value over time.
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The demand for money that arises because holding money over short periods is less risky than holding stocks or bonds is called the
A) transactions demand for money. B) opportunity cost demand for money. C) liquidity demand for money. D) speculative demand for money.
The market for unskilled labor is illustrated in the figure above. If a minimum wage of $5 per hour is imposed, an employer who breaks the law will be able to find a worker who is willing to work for
A) less than or equal to $4 per hour. B) between $4 and $5 per hour. C) more than or equal to $5 per hour. D) None of the above because workers are not willing to supply labor for wage rates less than $5 per hour.