8 good questions and answers about "the meaning of money - what is money"

What is an asset called when it can be easily converted to cash?
Liquid assets
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Is your abnk account money even if it is not converted to cash? For what 2 reason is this true?
Yes
currency in circulation and chequable deposits  is considered money
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What do we call bank accounts on which people can write cheques?
Chequable deposits or demand deposit
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What is the total value of financial assets in  the economy that is considered money? Formula?
Money supply
MS =demand deposit+ currency in circulation
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How do we describe the narrow definition of money?
This is the most liquid assets, like the demand deposit and the currency in circulation
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Why is money crucial in in generating gain from trade?
Makes indirect exchange possible.
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What do we call the problem in a barter system when two parties can trade only when each wants what the other has to offer?
Double coincidence of wants
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What is the solution for the double coincidence of wants? What does it mean?
  • Money
  • because individuals can trade what they have to offer for money and trade money for what they want
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