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Functions and Qualities of Money

The document discusses the functions and qualities of money including being a medium of exchange, unit of account, store of value, and means of deferred payment. It also discusses that money must be scarce, and traces the history from bartering of goods to the development of goldsmith receipts and the first banks.

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malakmarzouk95
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6 views4 pages

Functions and Qualities of Money

The document discusses the functions and qualities of money including being a medium of exchange, unit of account, store of value, and means of deferred payment. It also discusses that money must be scarce, and traces the history from bartering of goods to the development of goldsmith receipts and the first banks.

Uploaded by

malakmarzouk95
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

MONEY AND

BANKING 1
The functions of money
a medium of exchange
a unit of account
a store of value
a means of
deferred payment
Qualities of a good money:
Acceptability
Durability
Portability
Divisibility
Scarcity

2
 A good money must be limited in supply or scarce if people and
firms are to value it.

 The earliest form of money was goods.

 Specialization was the first step towards a wealthier society.

 Goldsmiths' receipts for deposits of precious metals were to


become the first paper money, and goldsmiths were the first
banks.

 Trade is a necessity for individuals to obtain those things they


cannot make on their own.
3
 Because money is a good that is generally acceptable in exchange for
a11 other goods we do not have to search for a person who is willing
to barter.
 an asset is any resource owned or controlled by a business.
 Loan is a thing that is borrowed, especially a sum of money that is
expected to be paid back with interest.
 Cash or notes and coins are generally accepted and recognized as money
in all economies.
 A bank can use money deposited by its customers to invest in the shares
of other companies.

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