Unit 3 The Individual as -Producer -Consumer & -Borrower

Money Money is a medium 方法 of exchange used to buy goods and services.

What is Money? Money is anything that is generally accepted in payment for goods and services Money is NOT the same as wealth or income Wealth is everything a person owns that has value Income is earnings per unit of time 3 Types of Money: Coins & Notes Debit cards & Credit cards.

The Functions of Money A way to exchange or trade a unit of account 计价单位 (tells us the value) a store of wealth 丰富的卖场 (save money in the bank)

Why do we use money? What would happen if we didn’t have money? The Barter System 易货系统 : goods and services are traded directly. There is no money exchanged. 5

Why do we use money? What would happen if we didn’t have money? Problems: 1.Before trade 贸易 could happen, each trader had to have something the other wanted. 2.Some goods cannot be split. If 1 goat is worth four chickens, how do you trade if you only want 1 chicken? 6

A BANK is a financial Institution involved in Money transactions

2 types of Banks 8

The central bank is responsible for supervising a country’s banking system? 1. Central Bank China - People’s Bank of China UK – The Bank of England USA – The Federal Reserve Bank

In China People’s Bank of China Agricultural Bank of China China Construction Bank Bank of communications Commercial banks want to make profit!!! 2. Commercial Banks 商业银行

11 Functions of the central bank (p.120) THE GOVERNMENT’S BANK (1) Makes notes and coins (2) Manages the national debt (3) Manages the countries gold and foreign currency reserves 外汇储备

Stock Exchange “A Market where Stocks can be bought and sold is called a Stock Exchange”

Stock Exchange Companies that are allowed to sell Stocks are called Public limited Companies

Stock Exchange Functions of the Stock Exchange: To help raise capital (money) for public limited companies

The New York Stock ExchangeNew York, USA NASDAQNew York, USA Tokyo Stock ExchangeTokyo, Japan Hong Kong Stock ExchangeHong Kong London Stock ExchangeLondon, UK Shanghai Stock ExchangeShanghai, China Frankfurt Stock ExchangeFrankfurt, Germany Bombay Stock ExchangeMumbai, India

Stock Market 16 A bear market Share price index Stock market prices are falling A bullish market Share price index Stock market prices are rising

How do big business’s raise capital (money) to grow? They sell stock 17 Why is the stock market important?

In which way do commercial banks earn profit? A.By charging more to lend money than they pay to borrow it B.By paying more to borrow money than they charge for lending C.By minting coins D.By printing notes 18

In which way do commercial banks earn profit? A.By charging more to lend money than they pay to borrow it B.By paying more to borrow money than they charge for lending C.By minting coins D.By printing notes 19

Which type of bank is responsible for supervising a country’s banking system? A. A saving bank B. An investment bank C. commercial bank D. Central bank 20

Which type of bank is responsible for supervising a country’s banking system? A. A saving bank B. An investment bank C. commercial bank D. Central bank 21

What is the main aim of a commercial bank? A.To act as banker to the government B.To issue bank notes C.To make a profit D.To manage the national debt 22

What is the main aim of a commercial bank? A.To act as banker to the government B.To issue bank notes C.To make a profit D.To manage the national debt 23

In which type of business organization are shares sold on the stock exchange? A.Sole proprietor B.Partnership C.Private limited company D.Public limited company 24

In which type of business organization are shares sold on the stock exchange? A.Sole proprietor B.Partnership C.Private limited company D.Public limited company 25

Stock Market Exercise Work in teams. You have 30 minutes. Using your phone or pad search the internet for the best stock to buy in China, then prepare a 3 minute speech why you choose those stocks. 1 person from your group will present 26

Stock Market Exercise Work in teams. You have 30 minutes. You need to have reasons why you choose your stock. If anybody say’s I just liked this one, I will ask you to sit down. We will vote for the best stock and presentation at the end of class 27