From 11:00PM PDT on Friday, July 1 until 5:00AM PDT on Saturday, July 2, the Shmoop engineering elves will be making tweaks and improvements to the site. That means Shmoop will be unavailable for use during that time. Thanks for your patience!
Questions1. What are examples of commodities used as currency? 2. Describe the three essential functions of money. 3. True of False: Americans have always used one type of money. 4. Define fiat money. 5. What is the nation’s most important financial institution?
1. Gold, salt, and whiskey are three possible answers. 2. Medium of exchange: We all agree to accept money when making transactions. Merchants agree to accept money in exchange for their goods; employees agree to accept money in exchange for their labor; Unit of accounting: Money provides a simple device for identifying and communicating value; Store of value: Money allows us to store the rewards of our labor or business. A week of work is translated into a convenient stash of cash. 3. False. Americans have used several types of money over the course of history. 4. Fiat money has value because the government says that it does. It is backed by the word of the government. 5. The Federal Reserve Bank