GROUPWORK 1

Passed by: Team Gorgeous

Passed to:
Mr. Gerardo Abadilla, CHE, MBA
Passed By:
Amistoso, Adliana Colin A.
Lopez, Raynalyn
Exercise 1-1

1. To say money is socially defined means that society, acting through congress
specifies what shall be included in the money supply.

2. Functions of money?
a.) as a medium of exchange
b.) unit of account or standard of value
c.) store of value
d.) standard of deferred payment.

3. Meaning of money as a unit of account.

- Example: If you are estimating your total expenses for the school next
semester, you are using money primary as unit of account.

4. Meaning of money as a store of value.

- Example: If you place your summer earnings in your savings account, you
are using money as store of value.

5. Meaning of money as a medium of exchange.

- Example: If you write a check on a bank to purchase a used Honda
Civic, you are using money as medium of exchange.

6. Price tag is an example of what function of money?

- It is an example of unit of account.

7. Stock market price is an example of what function of money?

- It is an example of store of value.

8. Check as payment exemplifies what function of money

- It exemplifies medium of exchange.
9. When economists say that money serves as a medium of exchange,
they mean that it is declared legal tendered by the government.

10. When economists say that money serves as a unit of account,

they mean that it is is a monetary unit for measuring and comparing the
relative values of goods

11. When economists say that money serves as a store of value,

they mean that it is a way to keep wealth in a readily spendable form for future use.

12. Fiat money is a money because government assets that it is.

13. Relationship of the purchasing power of the Peso to the price level?
- purchasing power is the reciprocal of price level.

14. The money supply is backed by the government's ability to control the supply of
money and therefore to keep its value relatively stable.

15. Checkable deposits are classified as money because they can be readily used
in purchasing goods and paying debts.

16. The value of money relationship with the price level is inverse.

17. The purchasing power of money and the price level vary inversely.

18. If the price index rises from 100 to 120, the purchasing power value
of the Peso will fall by one-sixth.

19. Other things equal, an excessive increase in the money supply, will
affect the purchasing power of the Peso in what way?
- decrease the purchasing power of each peso

20. The transactions' demand for money is most closely related to what function of
money?
- Medium of Exchange

21. The asset demand for money is most closely related to what function of money?
- Store of Value

22. The asset demand for money relationship with the rate of interest is varies
inversely with the rate of interest.

Exercise 1-2

True or False
1. Balance of payments could be one of the reasons for the adverse economic
condition? True

2. Money can be in any form, material, or appearance under "medium of exchange

concept/principle." True

3. Our tie with the U.S. is one that could partially explain our present monetary system
including
its effects good or bad. True
4. Political system is one of the key elements that shaped our monetary system. True
5. The lesser the currency exchange rate of the country to the dollar, the less
progressive the country would be. False

Define
6. Money
- Money is anything used as a medium of exchange, and is widely
acceptable for payment.

7. Portability
- Characteristics of good money, the concept of which focuses on its
capability of being carried anywhere with less effort.

8. Unit of account
-  The idea of which it is the concrete for evaluation of goods and
services that somebody wants to attain.
9. Durability
- One of the advantages of using metal as money, the idea of which is
the capability of metal to withstand any condition during its
circulation.

10. Store of value

- One of the functions of money, the concept of which is the usefulness
even when it lays idle.

11. Medium of exchange

- One of the functions of money, the concept of which is it should be
commonly used item for payment of goods and services.

12. Bartering
- The system before money came in, the concept of which is a pure exchange of
goods with another goods.

Enumerate the functions of money

13.) as a medium of exchange

14.) unit of account or standard of value
15.) store of value
16.) standard of deferred payment.

Enumerate the necessary attributes of money

17.) Durability

18.) Divisibility

19.) Transportability
20.) Noncounterfeit ability