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C11S1: The Evolution of Money

C11S1: The Evolution of Money. Main Idea: Money is any substance that functions as a medium of exchange, a measure of value, and a store of value. C11S1: The Evolution of Money. Key Terms: Barter economy Money Commodity money Fiat money Specie Monetary unit.

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C11S1: The Evolution of Money

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  1. C11S1: The Evolution of Money • Main Idea: • Money is any substance that functions as a medium of exchange, a measure of value, and a store of value.

  2. C11S1: The Evolution of Money • Key Terms: • Barter economy • Money • Commodity money • Fiat money • Specie • Monetary unit

  3. C11S1: The Evolution of Money • Barter Game: • You will be assigned a role and given goods. During the next 5 minutes, you must trade goods to acquire what you need. Roles are: • Blacksmith • Cattle Rancher • Corn Farmer • Lumberjack • Shoemaker

  4. C11S1: The Evolution of Money • Functions of Money • Medium of Exchange • It is accepted by all parties for goods and services • Historically, have been gold, silver, salt, etc. • ‘Salary’ comes from ‘salarium’ – Latin for a payment of salt

  5. C11S1: The Evolution of Money • Functions of Money • Measure of Value • We see a price, we know something’s value

  6. C11S1: The Evolution of Money • Functions of Money • Store of Value • Money must hold value until it is needed

  7. C11S1: The Evolution of Money • Money in Early Societies • Other items used as money • Examples of commodity money: • Tea leaves pressed to bricks in China • Blocks of cheese in Russia

  8. C11S1: The Evolution of Money • Money in Colonial America • Much commodity money used • Wampum (Narragansett Native American money) was given monetary value • Paper Money: • Some was printed by individuals • Continental dollars were issued to fund the Revolutionary War • Specie: • Most desirable form of money • Limited supply

  9. C11S1: The Evolution of Money • Origins of the Dollar • Pesos in America • Many circulated in America during our first years • Divided into pieces of eight, each piece is a bit • Looked like Australian talers and called that • Talers sounds like ‘dollars’ • Becomes the unit of currency, divided into tenths

  10. C11S1: The Evolution of Money • Characteristics of Money • Portability • Must be easily transferred and carried • Durability • Must last a long time when being handled lots • Divisibility • Need to be able to use as little or as much as you need • Limited Availability • Must be available, but limited • Loses value if there’s too much of it around

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