When economists refer to substitutability in discussing money, they are referring to
A)the rate at which households substitute work for leisure in exchange for money.
B)the rate at which one country's currency can be substituted for another country's currency.
C)the ease with which an asset can be converted into definitive money with no loss of value.
D)the ease with which currency can be converted into silver or gold.

Question

Quizplus · Accepted Answer

Substitutability in the context of money refers to the ease with which an asset can be converted into definitive money with no loss of value. For example, if a person has a savings account that can be easily converted into cash without losing value, then that account is highly substitutable for cash. The more substitutable an asset is for cash, the more closely it can be considered a form of money.

When Economists Refer to Substitutability in Discussing Money, They Are