Textbook Notes (362,730)
Canada (158,028)
MGTA02H3 (361)
Chapter 10

Chapter 10- Understanding Money and Banking

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University of Toronto Scarborough
Management (MGT)
Bill Mc Conkey

Chapter 10 Understanding Money and Banking1 Define money and identify the different forms it takes in the nations money supplyWHAT IS MONEYWealth the value of everything you ownBarter system exchange goods for goodsThe Characteristics of MoneyMoney any object generally accepted by people as payment for goods and servicesPortability lightweight and easy to handleDivisibility match units of money with the value of all goodsDurability shouldnt lose its valueStability everyone wants paper money and coinsThe Functions of MoneyMoney serves 3 functionsoMedium of exchange use money as a way of buying and selling thingsoStore of value money can be used to future purchases and stores valueoUnit of accountstandard of exchange all products can be valued and accounted for in terms of moneyCurrency is usually printed or minted by the government and guaranteed by that governmentThe money supply is limited so that you only get money from exchanging valueCant create money that would be counterfeitingCredit Card Plastic MoneyCredit cards do not qualify as money but money substitute serve as a temporary medium of exchange but are not a store of valueCredits are big business because they are convenient and extremely profitable for issuing companiesProfit derive from 2 sourcesoSome cards charge annual feesinterest on unpaid balances to holders 1120oMerchants who accept credit cards pay fees to card issuers2 Describe the different kinds of financial institutions that make up the Canadian financial system and explain the services they offerTHE CANADIAN FINANACIAL SYSTEMMany forms of money depend on the existence of financial institutions to provide a broad spectrum of services to individuals and businesses1
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