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Published byMarylou Melanie Blake Modified over 9 years ago
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10/31/14
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Asset ◦ Physical property or intangible right (e.g., plant, equipment, patents, money, or bonds) that has economic value Liquidity ◦ The ease with which an asset (such as a stock or bond) can be converted into cash. Cash is the most liquid asset. Bonds are relatively liquid, and land is usually illiquid. Money ◦ The medium of exchange; what people use to pay for goods and services
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Barter ◦ Trade without money is barter ◦ You have to find someone who wants what you have and has what you want. When this person is found it is called a double coincidence Trade with money takes place by having people sell what they have for money and then use the money to buy what they want. Commodity Money ◦ A widely traded good that was valued both for its use as a medium of exchange and for its intrinsic value i.e. gold What is another example of commodity money? Fiat Money ◦ All major currencies of the world are fiat ◦ Not backed by gold or any other valuable material
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Money is a measure of the value of goods and services, it is not the goods and services themselves ◦ Money is NOT “savings,” “income,” or “borrowings” Four Functions of Money ◦ Separate sales from purchases ◦ Unit of account ◦ Standard of deferred payment ◦ Store of value
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Write a one page double spaced summary on the video we watched in class (12 pt. font times new roman) ◦ In your summary you must include talk about the following What did you learn from the video? What is something you found interesting? In your own words define: What is money? What is a double coincidence of wants? What is a medium of exchange? What question(s) do you have for Mark Thornton?
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