Check Your Understanding (P253)

Questions

1. Which of the following assets serve primarily as a medium of exchange and which
ones serve as a store of value?:
a. Coins and bills
b. A term account
c. A savings account
d. A chequing account
e. A money market mutual fund

2. Examine the graph in figure 11.1 (the bar graph in the slideshow ‘Measuring
Canada’s Money Supply). Can you tell if money appears to be used more as a
medium of exchange or as a store of value? Explain.

3. Should a $50 bill found stuffed into a mattress be counted as part of M1? Explain.