ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Limited Supply
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Medium of Exchange
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Store of Value
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Fiat Money
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Detailed explanation-1: -The resources that we value-time, money, labor, tools, land, and raw materials-exist in limited supply. There are simply never enough resources to meet all our needs and desires. This condition is known as scarcity.
Detailed explanation-2: -Money is scarce because it is limited in supply. The Federal Reserve limits the supply of money so that it can be in a position to retain the value of money. Time is also scarce.
Detailed explanation-3: -When the supply of money in an economy is too high, it can lead to inflation. Inflation means the amount of money needed to buy a good or service increases-therefore money becomes less valuable, and the same amount of money can buy less over time than it could in the past.
Detailed explanation-4: -For example, time and money are characteristically scarce resources. In the real world, it is common to find someone with little of one resource or even both.