1. History, Functions, and Characteristics of Money

2. I need my lawn cut…would you be willing to mow my lawn for…

3. Remember…Trade has to be voluntary.
If you don’t benefit, you will not trade.
If you won’t trade for the paper, what would you be willing to trade for?

4. What is money?
Money is anything that is widely accepted as a form of payment for a good
Solution to the problems associated with bartering
Bartering: trading for g/s without the use of $
Why is Bartering Inefficient?
Goods and services must be immediately available
Both traders must agree on the value of the exchanged goods

5. Uses/Functions of Money
Facilitates transactions between buyers and sellers
Medium of exchange
Can be traded broadly for g/s in an economy

6. Standard of Value/ Unit of Account
Prices of other items can be compared to it

7. Store of Value
Can buy goods now or in the future.

8. Why is this better than Characteristics of Money…
Durable (Long lasting 75% Cotton 25% Linen)
Portable (can easily carry it around)
Divisible (Able to be divided into smaller parts)
Uniform (Same type or denomination. You can tell that $1 is $1 or $100 is $100)
Scarce (not readily available)
Acceptable (Form of payment approved by all or most. Consumers must have confidence in its ability to be exchanged)