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Chapter 10 Section 1 Money

Chapter 10 Section 1 Money

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  • Objectives for this Chapter are 1. Describe the three uses of money.2. Explain the six characteristics of money.3. Understand the sources of money’s value.
  • Key Terms: Money, Medium of Exchange, Barter, Unit of Account, Store of Value, currency, Community Money, Representative Money and Flat Money.
  • 1$ bill= Washington 2$ bill= Jefferson 5$ bill= Lincoln 10$ bill=Hamilton 20$ bill= Jackson 50$ bill= Grant 100$ bill= Franklin 500$ bill= McKinley 1,000$ bill= Cleveland 5,000$ bill= Madison 10,000$ bill= Wilson
  • A medium of exchange is anything that is used to determine value during the exchange of goods and services. A unit of account is a means for comparing the values of goods and services. A store of value is something that keeps its value if it is stored rather than used.
  • What is Medium of Exchange?Anything that is used to determine value during the exchange of goods and services. What if Money didn’t exist? Barter is still used today. Asia, Africa, and Latin America. Still used informally here in the U.S. Have you ever Bartered for anything?
  • Money keeps it value with one exception of inflation ~ general increase of prices.Example : P. 244Sell VCR to purchase CD Player. $100.00Don’t purchase CD Player right away ~ keep money. $100.00U.S experiences 10 percent inflation. The money your received would have 10 % less value. $90.00 Value.

Transcript

  • 1. Money
    Chapter 10 Section 1
    http://www.netvibes.com/economicsrchs#Chapter_10_Sec_1
  • 2. Objectives:
    Describe the three uses of money.
    Explain the six characteristics of money.
    Understand the sources of money’s value.
  • 3. Key Terms
    Money
    Medium of exchange
    Barter
    Unit of Account
    Store of Value
    Currency
    Commodity Money
    Representative Money
    Flat Money
  • 4. What do you know about Money?
    Make a short list of what you know about money.
    Can you name all 12 Americans who have been honored by Congress by having their image and name placed on paper currency? (hint: they’re all old, and dead)
    Watch Video
    c.640 – c. 630 BC First true coins produced in Lydia ~ Stater
  • 5.
  • 6. Money throughout the history of the world
    Shells
    Live stock
    Precious stones
    Skulls
    Pearls
    Wheat
    Feathers
    Brass
    Silver
    Gold
    Paper money
  • 7. What is money?
    Money is anything that serves as a medium of exchange, a unit of account, and a store of value.
  • 8. What is money? (cont’d)
    Money as a Medium of Exchange
    A medium of exchange is anything that is used to determine value during the exchange of goods and services.
    Money as a Unit of Account
    A unit of account is a means for comparing the values of goods and services.
    Money as a Store of Value
    A store of value is something that keeps its value if it is stored rather than used.
  • 9. Money as a Medium of Exchange
    Anything that is used to determine value during the exchange of goods and services.
    What if money didn’t exist?
    Barter ~ exchange of one thing for another. Give you this for that.
  • 10. Money as a Unit of Account
    A means for comparing the values of goods and services.
    Comparing the value of items sold in stores.
    • clothing
    • 11. Food items
    • 12. Entertainment, concerts, movies
  • Store of Value
    Money keeps it value with one exception of inflation ~ general increase of prices.
    Example : P. 244
    • Sell VCR to purchase CD Player. $100.00
    • 13. Don’t purchase CD Player right away ~ keep money. $100.00
    • 14. U.S experiences 10 percent inflation. The money your received would have 10 % less value. $90.00 Value.
  • Question? P. 244
    As a medium of exchange money determines value during the exchange of goods and services. As a unit of account, it provides a way to compare the value of goods and services. As a store of value, it general keeps its value if it is stored rather than spent.
    How does inflation affect the use of money as a store of value?
  • 15. Characteristics of Money
    The coins and paper bills used as money in a society are called currency. A currency must meet the following characteristics:
    Durability
    Objects used as money must withstand physical wear and tear.
    Portability
    People need to be able to take money with them as they go about their business.
    Divisibility
    To be useful, money must be easily divided into smaller denominations, or units of value.
  • 16. Characteristics of Money (cont’d)
    Uniformity
    Any two units of money must be uniform, that is, the same, in terms of what they will buy.
    Limited Supply—SCARCITY!
    Money must be available only in limited quantities.
    Acceptability
    Everyone must be able to exchange the money for goods and services.
  • 17. Question? Page 245
    Coins used throughout the Roman Empire provide a good example of the six characteristics of money.
    What does the fact that Roman coins have been found in places as far from Rome as Britain and Egypt suggest about how well the coins served as currency?
  • 18. Sources of Money’s Value
    Commodity Money
    Commodity money consists of objects that have value in themselves.
    Representative Money
    Representative money has value because the holder can exchange it for something else of value.
    Fiat Money
    Fiat money, also called “legal tender,” has value because the government decreed that is an acceptable means to pay debts.
  • 19. The Three Uses Of Money Review
    Money is anything that serves as a
    Medium of exchange
    Unit of account
    Store of value
  • 20. 3 Functions of Money
    Medium of exchange, Money determines the value during the exchange of goods and services.
    Unit of Account, provides a way to compare the value of goods and services.
    Store of Value , It generally keeps it’s value if it is stored rather than spent.
  • 21. Money Quiz : http://www.wdfi.org/ymm/kids/history/quiz.asp
    Practical Money Skills Game http://www.practicalmoneyskills.com/games/quiz/index.html
    Facts about Money: http://www.factmonster.com/ipka/A0774850.html