1. Money What are the 3 functions of money and which is the most important?

2. Characteristics of Money 1.Durability-not easily destroyed

3. 2.Portability-easy to carry and transfer

4. 3.Divisibilty-easily divided into smaller amounts 25/5=5

5. 4. Uniformity-all forms of money look similar

6. 5. Limited Supply-the Federal Reserve limits the amount of money in circulation

7. 6. Acceptability-everyone can exchange it for goods and services

8. Source of Moneys value Fiat Money- Money that has value because the government has ordered that it is an acceptable means to pay debts

9. Functions of Money 1.Medium of Exchange- anything that is used to determine value during the exchange of goods and services 2. Unit of Account-means for comparing the values of goods & services 3. Store of Value-keeps its value if you save it