1. Its all about the Benjamins! But…..why?

2. Money! Why do we care? Ever look at a dollar bill? Ever look at a dollar bill? What makes it so special? What makes it so special? Its just green paper. Its just green paper. There must be something unusual or unique about paper currency that makes it valuable. There must be something unusual or unique about paper currency that makes it valuable. After all, its just green paper. After all, its just green paper.

3. Well…lets think for a minute What exactly is the purpose of money? What exactly is the purpose of money?

4. So, we can say money has 3 main Functions. A medium of exchange A medium of exchange A store of value A store of value A standard of value A standard of value What do they mean though? What do they mean though?

5. Medium of Exchange This seems obvious. This seems obvious. Ever try to barter something? Ever try to barter something? It’s a pain in the butt. It’s a pain in the butt. Instead, why not just exchange purchasing power? Instead, why not just exchange purchasing power? It makes a great deal more sense. It makes a great deal more sense. Money represents that purchasing power. Money represents that purchasing power.

6. Store of Value Money is great. It keeps it value if you decide to hold on to it. Money is great. It keeps it value if you decide to hold on to it. Months, even years later, it is still worth basically the same thing. Months, even years later, it is still worth basically the same thing. Of course, inflation and deflation can play into this. Of course, inflation and deflation can play into this.

7. Standard of Value How many goats is your car worth? How many goats is your car worth? You don’t know? Neither do I. You don’t know? Neither do I. That is because goats are not a standard of value. That is because goats are not a standard of value. Money lets us express the value of things in currency terms. Money lets us express the value of things in currency terms.

8. But we aren’t done yet! Coins and paper bills are known as currency. But we have had many different types of money in history. Coins and paper bills are known as currency. But we have had many different types of money in history. There are six characteristics that economist use to determine how useful a particular thing would be as currency. There are six characteristics that economist use to determine how useful a particular thing would be as currency.

9. Six Characteristics of Money Durability Durability Portability Portability Divisibility Divisibility Uniformity Uniformity Scarcity Scarcity Acceptability Acceptability

10. The First Three Durability Durability Money must withstand physical wear and tear. Money must withstand physical wear and tear. Portability Portability Money must be able to be transported easily. Money must be able to be transported easily. Divisibility Divisibility Money must be easily divided into smaller denominations. Money must be easily divided into smaller denominations.

11. The Last Three Uniformity Uniformity Any two units of money must be the same in terms of what they will buy. Any two units of money must be the same in terms of what they will buy. Scarcity Scarcity Money supply must be carefully controlled. Money supply must be carefully controlled. Acceptability Acceptability Finally, everyone in the economy must accept the currency to be money. Finally, everyone in the economy must accept the currency to be money.