1 / 17

MONEY

MONEY. What is money?. Anything that people will accept as payment for goods & services. Types of Money. Commodity Money Derives its value from the type of material from which it is composed Best example in history are coins made from precious metals

starr
Download Presentation

MONEY

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. MONEY

  2. What is money? • Anything that people will accept as payment for goods & services

  3. Types of Money Commodity Money • Derives its value from the type of material from which it is composed • Best example in history are coins made from precious metals • Problem w/commodity money  people hoard it if it becomes too valuable

  4. Representative Money • Paper money backed by something hard (gold/silver)

  5. Fiat Money • Nothing hard backing it, but declared by the gov’t & accepted by citizens to have worth • Started in 1971 • Gov’t must control its supply or maintain its scarcity for the dollar to be worth more Why is U.S. money considered “fiat money?” • It’s only money because our gov’t says it is.

  6. Functions of Money • Medium of exchange • Measure of value • Store of value

  7. Physical Characteristics of Money Portable • Money needs to be small, light & easy to carry • Paper $ is easy to carry

  8. Divisibility • If broken down, it can’t lose its value • Change can be made

  9. Durability • Sturdy enough to last throughout many transactions

  10. Uniformity • Having features and markings that make it recognizable

  11. Economic Characteristics of Money Stability of value • You must control inflation

  12. Scarcity • Money must be scarce to have any value

  13. Acceptability • Everyone must agree to its value What two types of money did American citizens reject? 1. Susan B. Anthony dollar 2. 2 – dollar bill

  14. What makes up the money supply in the United States? • Currency – coins and paper • Checking account/demand deposits • Near money – including savings accounts

  15. Checks are not legal tender! • You cannot be forced to accept a personal check for payment of a debt. • Over 80% of all spending is done through checks. • Even if you use credit cards, you usually pay them off with a check.

  16. Checks are safer than cash • You have a record of the transaction • If you lose a check, you can stop payment • If you lose a credit card, you can cancel the card • If you lose cash, YOU LOSE!

  17. Cashless Society?? • Over the last 10 years, society has relied more on credit & debit cards • Credit debt has gone up

More Related