$Money$ Describe it… What is it made out of? What does it look like? Locate it… Where did you last see some? Where can you go to find some? Analyze it… If you were given $10 what would you do with it? If you were given $1000 what would you do with it? Think about it… What is the difference between a $10 bill and a $100 bill? Why can’t you buy anything with one of those squashed pennies or ripped cash?

Money Money is a good that acts as a medium of exchange in transactions that represents the actual value of goods and services.

Examples

Paper money Paper money is a bill of credit issued, usually by a bank or government, that ensures its value. Specie value is paper money’s direct value in some asset.

Other things that have been used as money… Coins, checks, shells, tobacco leaves, tulips…

Securities Securities are certificates that promise the repayment of money at some point in the future plus interest. Stocks in a company and government bonds are examples of different kinds of securities in which people invest their money hoping to make a profit in the future.

What is the value of money? The real value of money is determined by the goods and services money can buy. Doubling the amount of money in an economy overnight would not, by itself, make people better off, because there would still be the same amount of goods and services produced and consumed, only at higher prices.

Why is money important to the economy? Money is important to an economy because as it replaces barter, which makes exchange less costly. As a result, people are more likely to specialize in what they produce, and then use money to buy whatever they want to consume, this increases the overall levels of production and consumption in a nation.

Money is a good that acts as a medium of exchange in transactions that represents the actual value of goods and services. Securities are certificates that promise the repayment of money at some point in the future plus interest. Stocks in a company and government bonds are examples of different kinds of securities in which people can invest their money. Paper money is a bill of credit issued, usually by a bank or government, that ensures its value. Specie value is paper money’s direct value in some asset. Brokers are people who handle the trading of stocks for individuals or companies who don’t or can’t go to the trading floor. As a store of value, money makes it easier for people to save and defer consumption until the future. Alexander Hamilton designed and implemented the nations earliest economic policies George Washington was a main factor in getting Hamilton’s policies heard and passed in Congress Thomas Jefferson and James Madison both opposed Hamilton’s plans, claiming that it was unfair to the people and that it was unconstitutional The establishment of a national bank allowed the government to issue paper money, store revenue from taxes, and issue loans. The New York Stock Exchange was formed early in America’s history, but was not a major indicator of economic health until much later.

The Credit for our Economy Who gets it?

Setting the Stage

Alexander Hamilton designed and implemented the nations earliest economic policies George Washington was a main factor in getting Hamilton’s policies heard and passed in Congress

The Debt

The Theory The Central BankThe Confidence in Credit

Money and Banking

The Agenda

Opposition Thomas Jefferson and James Madison both opposed Hamilton’s plans, claiming that it was unfair to the people and that it was unconstitutional

The Compromise

THE RESULT The establishment of a national bank allowed the government to issue paper money, store revenue from taxes, and issue loans.

The Stock Market Brokers are people who handle the trading of stocks for individuals or companies who don’t or can’t go to the trading floor. The New York Stock Exchange was formed early in America’s history, but was not a major indicator of economic health until much later.

References Zarb, Frank G. and Gabriel T. Kerekes. (1970). The Stock Market Handbook: Reference Manual For the Securities Industry. Illinois: Jones-Irwin, Inc. pp American Experience. Alexander Hamilton. PBS.org, accessed on 3 November 2008 from Grubb, Farley. (2006). Benjamin Franklin and the Birth of a Paper Money Economy. Federal Reserve Bank of Philadelphia, accessed on 1 November 2008 from Davidson, James West and Michael Stoff. (2002). The American Nation, Ch. 9, Sec. 1. Upper Saddle River, New Jersey: Prentice Hall. pp