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MGTA02H3 Full Course Notes
Store of value: money can be used for future purchases thus it. Unit of account: money lets us measure the relative values of goods. All values can be valued and accounted for term of money. Not qualified as money but subsitiude of money. Temporary medium of exchange but does not store value. Big business for 2 reason: convenient, extremely profitable for issuing companies. Profit derives from 2 sources: annual fee, or interest on unpaid balances, merchants who accept credit cards pay fees to card issuers. Main function of financial institution is to ease the flow of money from sectors with surpluses to those with deficits. Bank can issue financial claims against itself by making available funds for checking and saving accounts. 4 distinct legal area: chartered banks, alternate banks, life insurance companies, investment dealers. Chartered banks: a privately owned profit seeking firm that serves individuals non business organization and business as financial intermediary.