国际经济学_316754_b_14国际经济学_316754_tb_14国际经济学_316754_tb_14国际经济学_316754_tb_14.docVIP

Chapter 14Money, Interest Rates, and Exchange Rates (Essay Questions 1. What are the main functions of money? Answer: Money serves in general three important functions: a medium of exchange; a unit of account; and a store of value. As a medium of exchange, money avoids going back to a barter economy, with the enormous search costs connected with it. As a unit of account, the use of money economizes on the number of prices an individual faces. Consider an economy with N goods, then one needs only (N – 1) prices. As a store of value, the use of money in general ensures that you can transfer wea