ECON 1BB3 Chapter 10: Chapter 10 – The Monetary System.docx
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ECON 1BB3 Full Course Notes
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Barter the exchange of one good or service for another to obtain the things they need. An economy that relies on barter will have trouble allocating its scarce resources efficiently. In such an economy, trade is said to require the double coincidence of wants the unlikely occurrence that two people each have a good or service that the other wants. Money: the set of assets in an economy that people regularly use to buy goods and services from other people. If you owned the microsoft corporation, you would be wealthy, but this asset is not considered a form of money. You could not buy a meal or a shirt with this wealth, without first obtaining some cash. According to economist"s, money includes only those few types of wealth that are regularly accepted by sellers in exchange for goods and services. Medium of exchange: an item that buyers give to sellers when they want to purchase goods or services.