1)What are the three functions of money? Can you give an example of each from your daily life?
2)What is fiat money? Why does fiat money have value (or not have value)?
3)Construct a basic T-account for a bank operating under a
fractional reserve system.
4)What is the present value of $15,000 that you will earn five years from now? (Assume that the risk-adjusted rate of interest is 10 percent. What if you earn the $15,000 two years from now?
The three functions of money are as follows:
These are the three basic functions of money with examples.
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