Unit 1 topic 1
- Created by: ruyb
- Created on: 05-03-18 10:17
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- Unit 1 topic 1
- features of money
- acceptable
- people accept it as payemnt
- divisable
- divided into smaller amounts
- durable
- lasts long enough
- homogeneous
- alll looks the same
- recognisable
- other people know its value
- portable
- can be moved easily
- scarce but sufficient
- just enough
- acceptable
- functions of money
- means of exchange
- store of value
- unit of account
- a means of deferred payment
- legal tender
- Coins or banknotes that must be accepted if offered in payment of a debt.
- development of money
- fiduciary value
- Value based on trust in the banking system.
- representatioal value
- The value that an item represents rather than the value it has in
itself:
- banks notes and coins
- The value that an item represents rather than the value it has in
itself:
- intrinsic value
- The value that an item has in itself,
- rice , beans, gold
- The value that an item has in itself,
- fiduciary value
- Things to consider
- a double coincidence of wants
- a situation where two people have goods and services that the other requires
- rate of exchange
- How much one item is worth in terms of another
- Eg a bag of flour is worth 2 bags of rice
- E.g one british pound is worth 1.5 euros
- How much one item is worth in terms of another
- a double coincidence of wants
- Inflation
- a rise in prices meaning the purchasing power of money falls
- features of money
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