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Economic Theory
3. The ______ value of common U.S. coins is much less than the
value of these coins as money.
4. Money’s real value is measured by its ______ power – by the
quantities of goods and services that money can buy.
5. When the prices of goods and service ______, a given amount of
money buys less, so the value of money declines.
6. When prices fall, the value of money _______.
7. Thus money’s value or purchasing power is inversely related to
general level of ______ in an economy.
8. Money like anything else derives its value from its ______.
9. Assuming a constant rate of use, if the volume of money grows
more ______ than the rate at which goods and services are produced,
prices will rise.
10. This will ______ because there will be more money than goods
and services to spend it on at prevailing prices.
11. On the other hand, if the growth in the money ______ does not
keep pace with the economy’s current production of goods and services,
prices will fall and the value of money will increase.
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