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Money%20and%20Banking%20-%20HO%201

Money%20and%20Banking%20-%20HO%201 - Money Q What is money...

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Money Q: What is “money?” Wow! Whoever lives there must have a LOT of money! What they have is a lot of WEALTH! They may not be holding much money. Money is one of many assets we might hold our weal in. It is unique in that money, unlike other assets, serves as a: Money serves as a Store of Value , an asset we can hold our wealth in. But we are more likely to hold most of our wealth in other, non- money, assets…..like this house…..stocks and bonds .... etc.!
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Medium of Exchange We will accept money for goods and services……..and goods and services for money. This is the “medium of exchange” function of money. Q: What would the world be like with no medium of exchange, without money? Q: Would this class – Econ 252 – exist if we had no medium of exchange?
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Unit of Account Prices are quoted in monetary units. This is money’s role as “unit of account.” From money prices we can readily determine relative prices, what we give up in other goods when we buy a good or service:
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