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Personal Experience with Money: Cash vs. Bank Balances
A common personal experience illustrates the prevalence of bank money over physical currency. Most people carry only a small amount of cash (notes and coins) for minor transactions, while holding significantly larger balances in their bank accounts, which are easily accessible through digital means like a phone app.
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Economics
Economy
Introduction to Macroeconomics Course
Ch.6 The financial sector: Debt, money, and financial markets - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
CORE Econ
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Limited Individual Holdings of Banknotes as a Store of Wealth
Personal Experience with Money: Cash vs. Bank Balances
Consider the following data for a hypothetical modern economy: Physical currency (notes and coins) in circulation is $500 billion. Total deposits held by the public in commercial banks amount to $9,500 billion. Based on this information, what is the most accurate conclusion about this economy's money supply?
Critique of a Statement on Money Supply
Analyzing a Policy's Impact on Money Supply
In a typical modern economy, the total value of all physical currency (notes and coins) in circulation is significantly larger than the total value of all deposits held in commercial bank accounts.
Explaining the Composition of the Modern Money Supply
Match each form of money to the description that best characterizes its scale and nature within a typical modern economy.
In a modern economy, the total value of deposits held in commercial banks is vastly ________ than the total value of physical currency in circulation, making bank deposits the dominant form of money.
An economist is examining the composition of the money supply in a typical, developed modern economy. Arrange the following forms of money in descending order, from the one that constitutes the largest portion of the total money supply to the one that constitutes the smallest.
Misinterpreting the Scale of Physical Currency
Evaluating a 'Cash-Only' Business Model
Learn After
Managing Personal Funds: Physical vs. Digital
Analysis of Personal Money Management
An individual is buying a new laptop for $1,200. They choose to pay with their debit card rather than with physical cash. Based on common financial habits, what is the most likely reason for this choice?
The common behavior of individuals holding most of their spending money in a bank account rather than as physical cash is primarily a reflection of their concerns about the long-term stability of the national currency.
Evaluating Modern Money Habits
Weekly Financial Strategy
Match each financial activity with the most common form of money used and the primary reason for its use, based on typical personal finance habits.
An individual is planning their finances for the upcoming week. They anticipate several small, daily expenses like buying coffee and lunch, and one large expense: purchasing a plane ticket online. Which of the following financial arrangements most accurately reflects how a typical person would manage their money for this week, based on common financial habits?
An individual typically keeps a small amount of physical currency on hand for immediate, minor purchases, while the bulk of their funds are held as ______ in a bank account, primarily for safety and ease of use in larger or online transactions.
Critique of a 'Cashless' Financial Strategy