Money By: Ben Quick

The Role of Money Medium of Exchange – a seller will accept it in exchange for a good or service - Prior to the development of money people had to barter ( Exchange goods and services for other goods and services)

The Role of Money Unit of Accounting – measures and compares the value of goods and services to one another - We know that a gallon of gas is worth more than a piece of gum because the gasoline’s dollar value is greater than the gum’s dollar value

The Role of Money Store of Value – individuals can accumulate and save money in order to make large purchases or for later use

Characteristics of Money Durable – will last Portable – easily transported Divisible – Can be broken down into smaller units Stable in Value – Must not rapidly change in value Scarce – limited supply Accepted – must be taken as payment for debt or purchases

Types of Money Representative Money – Money that is backed by or exchangeable for some commodity (like gold or silver)

Types of Money Fiat Money – money that has a face value ordered by the government and deemed Legal Tender (by law must be accepted as payments)

Types of Money Commodities Money – mediums of exchange that have a value as a commodity, aside from their value as money. - Example: cattle, gems, etc..

Questions?