Lecture 9 Money.ppt - Money Money And Payments Systems Money and How We Use It •Money is an asset that is generally accepted as payment for goods and

Lecture 9 Money.ppt - Money Money And Payments Systems...

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Money Money And Payments Systems
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Money and How We Use It Money is an asset that is generally accepted as payment for goods and services or repayment of debt. Income is a flow of earnings over time , where wealth is the value of assets minus liabilities.
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Money and How We Use It Money has three characteristics: 1. It is a means of payment 2. It is a unit of account, and 3. It is a store of value. The first of these characteristics is the most important
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Money and How We Use It 1. It is a means of payment People insist on payment in money. Without money, you would have to exchange goods and services directly for other goods and services—an exchange called barter. Barter requires a “ double coincidence of wants ”. Money is easier and finalizes payments so no further claim on buyers and sellers.
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Money and How We Use It 2. It is a unit of account . Money is used to quote prices and record debts - it is a standard of value.
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Money as a unit of account
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Money and How We Use It 3. It is a store of value A means of payment has to be durable and capable of transferring purchasing power from one day to the next.
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  • Spring '15
  • drihsan

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