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C h 10

C h 10. Money. Money- anything that serves as medium of exchange Medium of Exchange- anything that is used to determine value during and exchange of goods and services Barter- direct exchange of one set of goods or services for another.

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C h 10

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  1. Ch 10

  2. Money • Money- anything that serves as medium of exchange • Medium of Exchange- anything that is used to determine value during and exchange of goods and services • Barter- direct exchange of one set of goods or services for another.

  3. Unit of account- money provides the means for evaluating the value of goods or services • Store of Value- money keeps its value if you decide to hold on the money –or store- it instead of spending it. • Currency- coins or paper money

  4. Durability- money withstanding the physical wear and tear of being used over and over again • Portability- must be able to take it with you • Divisibility- must be easily divided into smaller denominations • Uniformity- Any two units of money must be uniformed in terms of what they will buy

  5. Limited supply-Federal Reserve System Controls the supply of money in circulation • Acceptability- Everyone must accept the value of the money and exchange it

  6. Commodity Money- An object that has value in and of themselves and that are also used as money. EX salt, cattle, precious stones • Representative Money- makes use of objects that have value because the holder can exchange them for something else of value • Fiat Money- “legal tender” has value because the government has decreed that it is an acceptable means to pay a debt

  7. 1791 First Bank of the United States. • To have a central location to deposit taxes collected by the Federal Govt. • Help Federal Govt Borrow money on Publics behalf • Issue Representative Money • The ensure state charted banks held sufficient gold and silver on reserve to exchange for bank notes should that be necessary

  8. 1791- 1st bank charter for 20 years • 1811 Charter Ran out. Not reinstated • 1816 – 2nd Bank of the United States was chartered. +Bank Panic of 1837- Wildcat Banks- on edge of frontier Fraud Different Currencies

  9. Greenbacks- • 1861 Both North and South during Civil war needed a portable currency. United States treasury issued the first paper money since the Continental called GREENBACKS bc they were printed in green ink. They were also known as “ demand notes” • The south issued Confederate Money backed by Cotton.

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