Barter vs. M oney

1. Barter vs. Money • You own a blue ray player, but want an ipod

2. Chapter 10 Section 1 - Money

3. Objectives • Describe the three uses of money. • Explain the six characteristics of money. • Understand the sources of money’s value.

4. 3 Uses of Money • Medium of Exchange • Determines value • Easier than Bartering • Unit of Account • Ex. You can compare the price of a jacket between stores • Store of Value • Over time money will still be valuable

5. 6 Characteristics of Money • Durability – Withstand wear and tear • Portability – Easily carried and transferred • Divisibility – easily divided into smaller units • Uniformity – Measured accurately a dollar bill is always able to buy $1 worth of goods • Limited Supply – If supply is high the money is less valuable • Acceptability – Money can be exchanged for goods and services anywhere

7. Sources of Money’s Value • Commodity Money • Used as money & also have value • Representative Money • Have value because can be exchanged for something else of value • Paper receipts backed by gold • Fiat Money • Its money cuz the government says so

13. “Money bewitches people. They fret for it and they sweat for it. They devise ingenious ways to get it and most ingenious ways to get rid of it. Money is the only commodity that it is good to be rid of. It will not feed you, clothe you, shelter you or amuse you unless you spend it or invest it. People will do almost anything for money and money will do almost anything for people. Money is a captivating, circulating, masquerading puzzle.”