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Money

Lecture 6.6. Money. Money. Money- anything people commonly accept in exchange for goods and services. Functions of Money. Medium of exchange - must be accepted in exchange for goods and services Measure of value - compare the value or worth of different items through prices.

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Money

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  1. Lecture 6.6 Money

  2. Money Money- anything people commonly accept in exchange for goods and services

  3. Functions of Money • Medium of exchange- must be accepted in exchange for goods and services • Measure of value - compare the value or worth of different items through prices. • Store of value - non perishable; can be saved and keep its value over time and even accumulate wealth

  4. Characteristics of Money • Stable – money should be scarce to maintain it’s value over time • Portable: be able to carry it around • Divisible: easily separated into parts • Durable: it must last

  5. Sources of Money’s Value • Commodity - item has value of its own. (ex. Gold, diamonds, salt) 2. Representative - represents value held elsewhere (ex. checks) 3. Fiat"let it be done". - money has value simply because the government says it does. (ex. Our currency)

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