2 Content $ 10 $ 10 $ 10 $ 10 10 $ 10 1.Barter System 2. Functions of Money$ 10103. Properties of Money$ 104. Types of Money
3 Content 1.Barter System 2. Functions of Money 3. Properties of Money 4. Types of Money
4 Barter SystemIn ancient times before money was invented, people exchanged goods directly for other goods. This way of carrying out exchange is called barter.
5 Inconveniences of Barter Difficulty in meeting double coincidence of wants
6 Inconveniences of Barter Higher cost of agreeing on an exchange ratio.
7 Inconveniences of Barter Lack of common measure of valueInconvenience of storing wealth
8 When Money Is Used...A person can sell his goods for money and then keep the money for future use.The act of selling is separated from the act of buying
9 Content 1.Barter System 2. Functions of Money 3. Properties of Money $$$2. Functions of Money3. Properties of Money4. Types of Money
10 Functions of Money As a generally acceptable medium of exchange As a store of valueAs a standard of deferred paymentAs a unit of account
11 So, what is MONEY ?MONEYMoney can be any asset that is generally acceptable as a medium of exchange for settling payments or debts.
12 Content 1.Barter System 2. Functions of Money 3. Properties of Money 4. Types of Money
13 Properties of Money Generally acceptable Limited in supply Durable PortableDivisibleHomogeneous
14 Content 1.Barter System 2. Functions of Money 3. Properties of Money $ 54. Types of Money
15 Types of Money C C Commodity money has intrinsic value e.g. cattle,silk, gold and silverConvertible paper moneye.g. gold and silver certificates
16 Types of Money Inconvertible paper money also called ‘Fiat Money’ simply declared by the government as moneylegal tendere.g. notes and coins
17 Types of Money Deposit money Demand deposit current account banks do not give any interestnot legal tendere.g. cheque
18 Types of Money Saving deposit interest is paid hold passbook to withdraw fundsnot allow to withdraw more than balance in one’s accounte.g. EPS
19 Types of Money Time (or fixed) deposits place one’s money with the bank for a period of time Maturity periodinterest rates are higher than those on savings depositsNegotiable Certificates of Deposits (NCDs)floating interest ratestransferable
20 Types of Money Electronic money card storing some amount of cash deducted when buy goods and services