MGTA02H3 Chapter 8: chapter 8 textbook notes

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28 Apr 2011
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MGTA02H3 Full Course Notes
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Money: object generally accepted by people as payment for goods (cid:0) portable (light weight & easy to handle), divisible (break down), durable (don"t die), stable. Barter economy: goods exchange for one another (time consuming) Money function: (cid:0) medium of exchange: instead of trading, use money to buy (cid:0) store value: store for future use (cid:0) unit of account: can measure goods. Credit card (plastic money): do not qualify as money, money substitute, temporary medium of exchange, cant store value, convenient, profitable for issuing company (cid:0) profit: charge annual fee and interest, merchant accept credit card pay fee to card issuer. Financial institution: flow of money from surplus to those with deficit. Chartered banks: privately owned, profit seeking, serve individual, non-business organization & business as financial intermediary (cid:0) chequing saving account, loan, main source of short term loan for business firm (cid:0) largest and most important.