1. The Functions and Characteristics of Money
Chapter 14
The Functions and Characteristics of Money

2. The Functions of Money Money Medium of Exchange Unit of Accounting
Seller accepts for a good or service
Barter, exchange of a good or service
Smaller societies
Unit of Accounting
Way of measuring value
U.S. dollar, Japanese yen
Store of Value- use at a later time

3. Characteristics of Money
Can come in many forms.
Should be
Durable
Portable
Divisible
Stable in Value
Scarce
Accepted

4. Types of Money Commodity money- cattle, gems Representative money
Backed by gold or silver
Give gold, get banknotes
We used to use this
Fiat money
Gov’t says it is acceptable for debts
Legal tender- money issued through the Gov’t