1.) A fiat currency is money because the State says it is.
2.)The Fed has two main measures of the money supply, M1 and M2, which include government money (Federal Reserve Notes) and bank money (checking deposits in M1 and checking plus savings deposits in M2).
3.) Money must meet the three functions.
Question: One explanation for inflation is that "there is too much money chasing too few goods." What does this mean? In your response, consider what money is, how it gets created, and how it relates to GDP.
Money is something which is used for the daily transactions in an economy.It comes in various forms such as highly liquid money(cash, notes, debit cards) and less liquid money (gold, bonds).
Answer and Explanation:
- Too much money chasing too few goods in an economy simply means that the resources in an economy are limited to produce the goods, but...
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fromChapter 11 / Lesson 4