J2_Money_Student

J2_Money_Student - Money Money Two Quick Question • How...

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Unformatted text preview: Money Money Two Quick Question • How many of you view money as one of the three most important things in your life? • Close your eyes and answer the following question What Is Money? Money is anything a group of people believe is valuable. Money is any set of items regularly used to improve the buying and selling of goods and services. Money is ……. Even the U.S. Gov. States This • Go to http://www.treas.gov/education/faq/currency/legal-tender.shtml Functions of Money • Money are items that perform 3 functions – Medium of exchange – ………. – Store of value Medium of Exchange • You sell a TV to a friend. What do you get? Money. • You buy a …... What do you give up? Money • Money is the medium that is Exchanged for goods and services Medium of Exchange • A medium of exchange is anything that is readily acceptable as payment. – In prisoner of war camps, people paid in cigarettes. – Island of Yap people pay in huge stone wheels. • Many of our slang words for money come from medium of exchange. – He is not worth their salt. – He/She is as good as gold – How many ……… Unit of Account • A unit of account is the denominator of quoting prices of the yardstick people use to post prices and record debts – Oil trade – Foreign travel – ……. Store of Value • A store of value is an item that people can use to transfer purchasing power from the present to the future. – Driveway – Coal miners – ….. What is money • If something passes all three tests – Is medium of exchange – Is store of value – Is unit of account then that is money. • Near money: Something that matches all 3 tests in certain circumstances. – Checks – Not all stores takes checks – ….. – Not accepted off campus History of Money • Money has gone through 4 distinct phases – Barter – Commodity money – Money backed by commodities – ……. • In times of economic crisis the phases are often repeated. Barter • Need Double Coincidence of Wants – I want what you have – You want what I have. – Both statements need to be true simultaneously....
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J2_Money_Student - Money Money Two Quick Question • How...

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