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20 download_doc-3.php - BUS-G 345 I. Meaning of money a....

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BUS-G 345 Chapter 3 I. Meaning of money a. Intro i. Definition of money 1. Anything that is generally accepted in payment for goods or services or in the repayment of debts a. Currency i. One type of money ii. Consists of dollar bills and coins 2. *There is no single, precise definition of money or the money supply ii. Distinction between money and wealth 1. Wealth is the total collection of pieces of property that serve to store value 2. Includes not only money but also other assets like jewelry, cars, and houses iii. Income 1. A flow of earnings per unit of time iv. Money 1. A stock which is a certain amount at a given point in time II. Functions of money a. Intro i. Three primary functions 1. Medium of exchange, unit of account, store of value a. Function as a medium of exchange is what distinguishes money from all other assets that are incorporated into wealth b. Medium of exchange i. Used to pay for goods and services ii. Promotes economic efficiency 1. Minimizes the time spent on exchanging goods and services a. Especially compared to a barter society
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BUS-G 345 Chapter 3 i. A society without money in which goods and services are exchanged directly for other goods and services b. Time spent trying to exchange goods or services is called a transaction cost i. In a barter economy they are high because people have to satisfy a
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20 download_doc-3.php - BUS-G 345 I. Meaning of money a....

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