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Functions of Money in Practice
A small business owner accepts both physical cash and debit card payments from customers. At the end of the week, the owner deposits the collected cash into the business's bank account, where it is combined with the funds from the debit card transactions. The owner plans to leave these funds in the account to pay for new inventory next month. Based on this scenario, analyze how both forms of money (physical cash and bank deposits) fulfilled the same two primary economic functions.
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Ch.6 The financial sector: Debt, money, and financial markets - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
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Introduction to Macroeconomics Course
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Functions of Money in Practice
Both physical currency (e.g., banknotes and coins) and bank deposits (e.g., the balance in a checking account) fulfill the same core economic functions. Which statement best analyzes a key practical distinction between them when they are used as a medium of exchange?
Shared Roles of Different Money Forms
A key difference between physical currency and bank deposits is that only physical currency can function as a store of value, as bank deposits are merely digital records.