The First Step in the Evolution of Money Involved the Use

question 91

Multiple Choice

The first step in the evolution of money involved the use of _____.

• A)physical commodities
• B)barter
• C)pieces of paper representing claims on physical commodities
• D)pieces of paper with no intrinsic value
• E)electronic entries representing claims on pieces of paper with no intrinsic value

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Definitions:

Compound Interest

Compound interest is the addition of interest to the principal sum of a loan or deposit, where interest in one period earns interest in subsequent periods.

Usury Laws

State laws that specify the maximum legal interest rate at which loans can be made.

Loanable Funds

Money available for borrowing, which comes from savings that consumers and businesses put into the financial system.

Real Interest Rate

The interest rate adjusted for inflation, reflecting the true cost of borrowing or the true return on investment.