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List the functions of money. Rank the different forms of asset in terms of their liquidity....

List the functions of money. Rank the different forms of asset in terms of their liquidity. What are the characteristics of a good that will make it a successful money standard? What determines the value of money? What backs the US currency?

List and compare the different financial intermediary.

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Answer #1

Functions of money:

1.act as transaction medium

2.gives value for things that is it have store value.

3.accounting purpose

Ranking can be made as :

Liquid asset- can easily change to cash.examples-stocks.

Investment asset-cannot easily convert to cash.example-land property ,buildings etc..

Characterstics of good includes-durability,portability,reliability,malleablity,utility,divisiblity,stablity.

Mainly supply and demand determines value of money.and also exchange rate of money,treasury note value,and value of the currency circulation .

US currency is not backed up with anything valuable such as gold or silver.it actually backed by the labor, wealth ,property of the US people.

Financial intermediary includes,commercial banks,investment bank,stock exchanges etc..

This channels funds from savers to borrowers.

Converts certain libalities into assets of different forms.

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