ANSWER SHEET ONE
Money in America
Money is used to buy goods or services and (1) ______ debts. (1) ______
In America, money supply consists of (2) ______ (paper (2) ______
money), coins, and demand deposits [(3) ______ ]. (3) ______
In a modern credit economy, money must possess two
most important attributes: acceptability and (4) ______. It also (4) ______
has two legal attributes: legal tender and (5) ______. (5) ______
Money performs four main functions:
a. standard of value;
b. (6) ______; (6) ______
c. store of value;
d. standard of deferred payment.
There are three partially conflicting theories of value for
explaining the (7) ______ in the value of American money, (7) ______
namely the commodity, quantity and income theories.
Coins are credit money or (8) ______ money whereas (8) ______
paper money consists of Federal Reserve notes. Demand
deposits are supplied depending on a bank’s total (9) ______ (9) ______
reserves.
The Federal Reserve, or Fed, as a central bank, (10) ______ and (10) ______
controls the nation’s money supply and credit.