Money
Anything that serves the three
basic functions.
“Copyright and Terms of Service
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Call TEA Copyrights if you have any questions.
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2
Other Terms
Note
• Paperbased
• Not coins
Currency
Money
• Exchanged
for goods
and services
• Because
“Federal
Reserve
Note” is at
the top of
the face
• The term
“note is a
formal
term that
we
interchang
e with the
term “bill”
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3
Functions of
Money
Medium of exchange
• Can be used to buy good and services
Store of Value
• Keeps its purchasing power over time
Unit of account
• Tells you how much different goods and service
are worth
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4
...based on the
“Functions of Money”
criteria... What else could
serve effectively as
money?
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5
Take a
closer
look...
at the 3
functions
of
MONEY
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6
Medium of Exchange:
Generally
Acceptable
Relatively
Scarce
Divisible
Durable
Portable
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Store of Value
It keeps its
purchasing power
over time.
People expect to
be able to hold
money and use it in
the future.
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Unit of Account
How much
goods and
services
are worth.
In the
United
States,
prices are
recorded
in dollars
and cents
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Bananas?
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SEASHELLS?
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Cows?
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Plastic Coins?
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These WERE used as
money
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