*USE YOUR OWN WORDS *ANSWER THE FOLLOWING QUESTIONS Question 1: Money is defined by the three functions (or services) that it provides. What are the three main functions of money? Question 2: Give three examples of commodity money that has been used in the past and what made them special. Question 3: From 1500 to 1800, which nation's currency was in such wide usage it could be considered the first global currency and why did other countries adopt the usage of this currency rather than create their own currency? Question 4: Explain how commercial bank money is created. Question 5: Explain the difference between representative money and fiat money. Question 6: What is meant by the "balance" of international payments? What two things are being compared and why must they balance? Question 7: When a country imports more than it exports, what is expected to happen to its currency and why? Question 8: When a country A exports more than it imports, what must it do on the financial account to balance international payments and why? Question 9: Explain why the creation and control of the money supply in an economy depends on what policy measure the central bank decides to target. Question 10: Using the discussion from Ray Dalio's video, explain three things: (1) the role of credit in the modern monetary system, (2) why standard monetary and fiscal policy measures won't always work to offset a long-term economic cycle downturn and (3) what controversial tool must be used to achieve a "beautiful deleveraging" when a long-term economic cycle turns to contraction