Money (3.1)

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What is Barter?
Barter is when people exchange the goods or services they have to get the goods they want (without using money)
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What are three advantages of Barter?
It is direct (you can trust the goods), simple and you don't need anything else
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What are three disadvantages of Barter?
It is hard to value/set prices for things, some things are hard to save up and the other person may not want your goods
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What does Barter depend on?
Barter depends on a Double Coincedence of Wants
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What are the four functions of money?
Medium of Exchange,Unit of account (measure of values), Store of Value, Standard for deferred payment
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What does Medium of Exchange mean?
It is used to buy/pay for things
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What does Unit of account (measure of values), mean?
We can express all prices in terms of money
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What does Store of Value mean?
Money retains its value over time so that if we save up, the money is still worth as much
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What does Standard for Deffered Payment mean?
This allows people who lend money to know and trust what they will get payed back in the future
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What are the five characteristics of money?
Acceptability, Divisibility, Durability, Portability, Scarcity
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What is Acceptability?
Everyone accepts it as a payment for goods
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What is Divisibilty?
It can be divided into small and large units
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What is Durability?
It doesn't wear out or decay?
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What is Portability?
It is easy to carry around or send to someone
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What is Scarcity?
It is hard to copy or duplicate so it remains scarce and valuable
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Other cards in this set

Card 2

Front

What are three advantages of Barter?

Back

It is direct (you can trust the goods), simple and you don't need anything else

Card 3

Front

What are three disadvantages of Barter?

Back

Preview of the front of card 3

Card 4

Front

What does Barter depend on?

Back

Preview of the front of card 4

Card 5

Front

What are the four functions of money?

Back

Preview of the front of card 5
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