Money!

It makes the world go ‘round -

- but it doesn’t grow on trees.
Some money quotes
“The love of money is the root of all evil.”

1 Timothy 6:10

“The lack of money is the root of all evil...
what is money?
Money is anything people will accept.
What is the difference between money and
currency?
Money is the product of markets
It is defined by the function it perfor...
Currency - on the other hand - is something that has
changed considerably overtime. So... what makes a good
currency? A cu...
Such currency is knows as fiat
money
We accept it
as money
because the
government
says it’s
money.
So what, then, is money?
1. Money is a medium of exchange
- that is, it works as a vehicle for the exchange of goods
and s...
2. Money is a store of value
- that is, it is a safe and accessible store of wealth as it
maintains its purchasing power.
3. Money is a measure of value
- that is, it provides buyers and sellers with a unit of
account, or pricing standards. All...
How is money measured? (just
how much does Canada have?)
M1 = all Canadian currency in circulation + C$
demand deposits (c...
If not money...what?

The Barter
System
system of exchanging goods (or services) for
other goods (or services).
but - value still has to be assigned
value = what ...
problem...
barter requires a double coincidence of wants

each party has to be interested
in what the other party has to
o...
Ultimately, it is just easier to use money than to
compare apples to oranges.
Upcoming SlideShare
Loading in...5
×

18. money

184

Published on

Published in: Economy & Finance, Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
184
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
8
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

18. money

  1. 1. Money! It makes the world go ‘round - - but it doesn’t grow on trees.
  2. 2. Some money quotes “The love of money is the root of all evil.” 1 Timothy 6:10 “The lack of money is the root of all evil.” “The love of money is the root of all virtue.” G.B. Shaw G.B. Shaw “Money is like muck, not good except to be spread.” Sir Francis Bacon “Money is better than poverty, if only for financial reasons.” Woody Allen “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t know” Smith “Money often costs too much.” Ralph Waldo Emerson Will
  3. 3. what is money? Money is anything people will accept.
  4. 4. What is the difference between money and currency? Money is the product of markets It is defined by the function it performs (which we will see shortly) “Money is a mental tool used for economic calculation that ingeniously enables each of us to communicate what we value in an exchange.”
  5. 5. Currency - on the other hand - is something that has changed considerably overtime. So... what makes a good currency? A currency must be... Durable Portable Not easily copied Divisible Accepted Recognizable Have a face value greater than its actual value
  6. 6. Such currency is knows as fiat money We accept it as money because the government says it’s money.
  7. 7. So what, then, is money? 1. Money is a medium of exchange - that is, it works as a vehicle for the exchange of goods and services. - this eliminates the need for a “ double coincidence of wants.” vs.
  8. 8. 2. Money is a store of value - that is, it is a safe and accessible store of wealth as it maintains its purchasing power.
  9. 9. 3. Money is a measure of value - that is, it provides buyers and sellers with a unit of account, or pricing standards. All products may be valued consistently against a common measure.
  10. 10. How is money measured? (just how much does Canada have?) M1 = all Canadian currency in circulation + C$ demand deposits (chequing accounts). - most narrow definition - just $ in circulation. M2 = M1 + all money in term deposits (savings accounts) and money market accounts. - key economic indicator (along with CPI) used to forecast inflation. M3 = M2 + money in long term deposits, money-market funds and foreign currency deposits of residents in Canada. - broadest measure - used to estimate entire money supply with an economy.
  11. 11. If not money...what? The Barter System
  12. 12. system of exchanging goods (or services) for other goods (or services). but - value still has to be assigned value = what those involved think the goods are worth.
  13. 13. problem... barter requires a double coincidence of wants each party has to be interested in what the other party has to offer.
  14. 14. Ultimately, it is just easier to use money than to compare apples to oranges.
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×