MGTA02H3 Chapter 8: Chapter 8 notes
18 May 2011
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MGTA02H3 Full Course Notes
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What is money: money: any object generally accepted by people as payment for goods and services (usually stamped metal or printed paper; but can also include commodities, ex. The characteristics of money: portability: modern currency is lightweight and easy to handle, divisibility: modern currency is easily divisible into smaller parts with fixed values for each unit (ex. Value of fish rises and falls with the fishing season) Legal tender: medium of payment that is recognized by the legal system to be valid for meeting a financial obligation. Paper money is the most common form of legal tender. Credit cards: plastic money: not included in m-1 or m-2, credit cards are a substitute of money, not a store of value, they are a temporary medium of exchange, i. e. they are not a store of value. The canadian financial system: businesses need stable financial institutions to underwrite modernization and expansion, and individuals need them to handle currency.
