1. 10/31/14

2.  Asset ◦ Physical property or intangible right (e.g., plant, equipment, patents, money, or bonds) that has economic value  Liquidity ◦ The ease with which an asset (such as a stock or bond) can be converted into cash. Cash is the most liquid asset. Bonds are relatively liquid, and land is usually illiquid.  Money ◦ The medium of exchange; what people use to pay for goods and services

3.  Barter ◦ Trade without money is barter ◦ You have to find someone who wants what you have and has what you want.  When this person is found it is called a double coincidence  Trade with money takes place by having people sell what they have for money and then use the money to buy what they want.  Commodity Money ◦ A widely traded good that was valued both for its use as a medium of exchange and for its intrinsic value  i.e. gold  What is another example of commodity money?  Fiat Money ◦ All major currencies of the world are fiat ◦ Not backed by gold or any other valuable material

4.  Money is a measure of the value of goods and services, it is not the goods and services themselves ◦ Money is NOT “savings,” “income,” or “borrowings”  Four Functions of Money ◦ Separate sales from purchases ◦ Unit of account ◦ Standard of deferred payment ◦ Store of value

5.  Write a one page double spaced summary on the video we watched in class (12 pt. font times new roman) ◦ In your summary you must include talk about the following  What did you learn from the video? What is something you found interesting?  In your own words define:  What is money?  What is a double coincidence of wants?  What is a medium of exchange?  What question(s) do you have for Mark Thornton?