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Money
- 1. Money Chapter 10Section 1http://www.netvibes.com/economicsrchs#Chapter_10_Sec_1
- 2. Objectives:Describe the threeuses of money.Explain the six characteristics of money.Understand the sources of money’s value.
- 3. Key TermsMoneyMedium ofexchangeBarterUnit of AccountStore of ValueCurrencyCommodity MoneyRepresentative MoneyFlat Money
- 4. What do youknow 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 Videoc.640 – c. 630 BC First true coins produced in Lydia ~ Stater
- 6. Money throughout thehistory of the worldShellsLive stockPrecious stonesSkullsPearlsWheat FeathersBrass SilverGoldPaper money
- 7. What is money?Moneyis 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 ExchangeA medium of exchange is anything that is used to determine value during the exchange of goods and services. Money as a Unit of AccountA unit of account is a means for comparing the values of goods and services. Money as a Store of ValueA store of value is something that keeps its value if it is stored rather than used.
- 9. Money as aMedium of ExchangeAnything 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 aUnit of AccountA means for comparing the values of goods and services. Comparing the value of items sold in stores. clothing
- 11.
- 12. Entertainment, concerts, moviesStore of ValueMoney keeps it value with one exception of inflation ~ general increase of prices.Example : P. 244Sell VCR to purchase CD Player. $100.00
- 13. Don’t purchase CDPlayer right away ~ keep money. $100.00
- 14. U.S experiences 10percent inflation. The money your received would have 10 % less value. $90.00 Value.Question? P. 244As 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 MoneyThecoins and paper bills used as money in a society are called currency. A currency must meet the following characteristics:DurabilityObjects used as money must withstand physical wear and tear.PortabilityPeople need to be able to take money with them as they go about their business.DivisibilityTo be useful, money must be easily divided into smaller denominations, or units of value.
- 16. Characteristics of Money(cont’d)UniformityAny 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.AcceptabilityEveryone must be able to exchange the money for goods and services.
- 17. Question? Page245Coins 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’sValueCommodity MoneyCommodity money consists of objects that have value in themselves. Representative MoneyRepresentative money has value because the holder can exchange it for something else of value. Fiat MoneyFiat money, also called “legal tender,” has value because the government decreed that is an acceptable means to pay debts.
- 19. The Three UsesOf Money ReviewMoney is anything that serves as aMedium of exchangeUnit of accountStore of value
Editor's Notes
- #3 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.
- #4 Key Terms: Money, Medium of Exchange, Barter, Unit of Account, Store of Value, currency, Community Money, Representative Money and Flat Money.
- #5 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
- #9 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.
- #10 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?
- #12 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.