3 Ancient Money Cattle, Chattle, Capital- all from same root word Sal (Salt) Salary
4 Money in MesopotamiaSilver functioned as money in Mesopotamia. It acted as a means of exchange, a way to store wealth, and a way to define value
5 Women and Money in Mesopotamia "The average well to do woman wore golden earrings (sometimes large) and silver rings on the arms and the feet. Those silver rings have a standard weight (5 shekels...) identical with standard fractions of the brideprice, and it is possible that the rings actually represented the price paid." "Women in Mesopotamia," by M. Stol Journal of the Economic and Social History of the Orient, Vol. 38, No. 2, Women's History (1995), pp [Bolding, mine.]
6 Money in the Aztec Empire The Aztecs of Central America used cacao beans, from which chocolate is made, as money. Prices varied from a few beans for a piece of fruit to several thousand for an enslaved person.Aztec merchants had to take care when selling expensive items. Payment usually came stored in sacks, and the sacks might contain counterfeit money- bean husks filled with mud.
7 Forms of MoneySilver, gold, wheat, barley, grain, cattle, beans, coins, and now paperWeights and measures establish valueWhen people pay a certain amount of money for something, they expect the value of what they get in return to be equal (Baker’s Dozen)
8 Functions of Money Medium of exchange Unit of Accounting Store of value
9 Medium of ExchangeUse of money in exchange for goods or services
10 Unit of AccountingUse of money as a yardstick (measure) for comparing the values of goods and services in relation to one another.Ex.: If one i-pod costs more than another, the indication is that the more expensive one is a better product
11 Store of Value Use of money to store purchasing power for later use. Why is this function of money important?(Hint: it’s why paper money/ durable goods work better as money)
12 Characteristics of Money Anything that people are willing to exchange/ accept in exchange for goods. See exs. Above.Durable, portable, divisible, stable in value, scarce, accepted.
13 Types of Money Commodity Money Representative money Fiat Money legal tender
14 Commodity moneyA medium of exchange such as cattle or gems that have value aside from being money
15 Representative MoneyMoney backed by- or exchangeable for- a valuable item such as silver or gold.
16 Fiat MoneyMoney that has value because a government fiat, or order, has established it as acceptable for payments or debts. Hence, fake money is counter- fiat, or counterfeit.
17 Imagine that you live in a bartering society Imagine that you live in a bartering society. List 5 items that you use frequently, and identify 5 alternative goods that you would be willing to trade for them.
18 Section 2: The History of Money and Banking in The US Throughout the history of the US, Americans have used all kinds of moneyDuring the Civil War, the Federal Govt. finally set up a uniform currency for the countryIn order to regulate the money supply, Congress established the Federal Reserve System in The Federal Reserve became the nation’s central bank, issuing federal reserve notes, the currency we use today
19 Cont’dIn 1934, during the Great Depression, the Federal Government switched from a gold standard to a fiat money standardToday, banking has been transformed by electronics- Electronic Funds Transfer, ATM’s, and Internet banking
20 How do you think electronic banking has revolutionized how people bank?
21 Section 3: Types of Money in the US Money and Near MoneysCurrencyChecksCredit cards and Debit CardsNear Moneys
23 ChecksIssued by the bank, they can be used to transfer money to someone else without physically handing them currency
24 Credit Cards and Debit Cards Credit Card- A card issued to you by a bank that is essentially loaning you money to pay someone else at a price (interest rate)Debit Card- A card that is issued to you by your bank in the place of a check book. You use it to electronically transfer funds to the company that you are purchasing goods or services from.
25 Near MoneysMoney value held in stocks or savings accounts that can be easily accessed to get money to pay your bills
26 The Money SupplyVery hard to calculate because money is always in a state of fluxM1= money that can be spent immediately and against which checks can be writtenM2= M1+near moneys
27 Why are debit cards similar to money, whereas credit cards are not?