ECON 2035 Chapter : Ch 3
Document Summary
Outline: meaning of money, func6ons of money. Store of value: measuring money. Currency (dollar bills and coins) Perhaps even savings deposits: money must be dis6nguished from wealth or income. Wealth = value of all proper6es or assets, including currency and bank deposits, stocks, real estate, etc . Income = ow of earnings per unit of 6me. Func6ons of money: three important func6ons of money: Func6ons of money: medium of exchange. Need to nd someone who has the good that you want who wants the good that you have. And: costly barter e cient exchange. Be easy to carry. Func6ons of money: store of value. Evolu6on of the payments system: commodity money, checks (precious metals etc ) It must be universally acceptable and everybody is willing to take as payment. An instruc6on from you to your bank to transfer money. More mobile than cash: fiat money, electronic payment. Signi cant cost reduc6on guaranteed to be conver6ble)
