1. Do Now
Get out your notes: Ch. 11: Government Intervention in the Economy

2. What makes money, money? Learning Target
I can explain what makes money, money. I can show I understand by writing examples and create a scenario of a unique economic situation where a new currency is required.

3. Warm-up
On the warm-up, list pros and cons to using each item listed as currency.

4. What is Money?

5. Three FUNCTIONS of Money:
STORE OF VALUE– Money must hold its value over time It should not rot or deteriorate.
MEDIUM OF EXCHANGE– It makes trade easier by giving us one currency which we agree has value US Dollars are “legal tender”, which means they must be accepted for purchases.
STANDARD OF VALUE–
-Money allows us to compare the value of different objects It gives a common standard for the measurement of cost.

6. Six CHARACTERISTICS of Money:
ACCEPTABILITY - buyers and sellers must agree on the money.
SCARCITY - it must be rare enough to be of value.
PORTABILITY - it must be easy enough to transport.

7. Six CHARACTERISTICS of Money:
DURBILITY - money must store its value over time.
DIVISIBILITY - it must be possible to divide money into smaller units.
UNIFORMITY - all units of the money must be the same.

8. Types of Money:
COMMODITY-BACKED – The value of money is tied to the value of gold, silver or some other commodity.
-Money can be exchanged for equivalent value of commodity.
FIAT –
-Money is not backed by any commodity.
-Its value is determined by supply and demand.
-Faith in the money is the only thing giving it value.

10. What counts as “money” today?
CURRENCY- includes bills and coins circulating through the economy.
CHECKING DEPOSITS– accounts on which you can write a check.
TRAVELER’S CHECKS– similar to cash, used when travelling.

11. Not Quite Money:
SAVINGS ACCOUNTS – usually easy to access, but not considered “liquid.”
CREDIT CARDS – spending on them is technically borrowing, because the balance must be paid off It is possible to spend more than you actually have (debt).
DEBIT CARD –Although the card accesses money, the card itself is not considered a form of money.

12. Trade without Money
Get out your textbook and read pg

13. Trade without Money
Exchange of goods and services without money is called barter
Through a series of barter trades, Kyle MacDonald was able to trade his way up from a red paperclip up to a house.
Ancient cultures used to use a combination of barter and credit.

14. Trade without Money
Barter illustrated by Dwight Schrute: