RSM100Y1 Chapter 18: RSM Chapter18
Document Summary
Money any portable, divisible, durable, and stable object generally accepted by people as payment for goods and services. Divisible: easily broken down to match the value of goods. Durable: must not spoil or easily wear out. Stable: must be stable enough to hold its value over time, apart from minor fluctuations. Barter economy one in which goods are exchanged directly for on another. A single medium of exchange for goods and services instead of barter. Allows measurement of the relative value of goods and services. Buyers and sellers must agree on the value of money. The value of money depends on its supply. M-1 counts only the most liquid forms of money- currency and demand deposits. Currency: paper money and coins issued by the government. Demand deposits: money in chequing accounts; counted as m-1 because such funds may be withdrawn at any time without notice.
