Definition, Measurement, and Functions of Money

Ava Garcia

8 min read

Listen to this study note

Study Guide Overview

This study guide covers the definition and types of money (fiat, commodity), the three functions of money (medium of exchange, unit of account, store of value), M1 and M2 money supply measurements and their formulas, the monetary base (M0/MB) and its distinction from the money supply, and liquidity. It includes practice questions and tips for the exam.

How are we doing?

Give us your feedback and let us know how we can improve

Question 1 of 8

Feeling confident? 😎 Which of the following is the MOST basic function of money?

A luxury good

A medium of exchange

A speculative asset

A legal contract