Economics 3.1
Functions of moneyyy
medium of exchange
measure of value
store of value
standard of deferred (delayed) payments
Widely recognized, does not require a double coincidence of wants for buyers and sellers
It helps aid between the buys and sellers to set different prices for different goods, based on the laws of supply and demand
it can be set aside for an extended period of time *even in the form of savings
it fulfills the ability for that function as people can make and receive loans, goods can be purchased now then paid later
pop: Saving money in the bank (storing) will not lead to its value depreciating, either it remains the same or gets in interest in terms of value
DCOW: both parties in an exchange requires something the other desires
If demand is low and supply is high, price is low; if demand is high and supply is low, price is high
bank loans. get initiative, pay later
Characteristics of moneyyyyy
Durability
Divisibility
Acceptibility
Scarcity
Uniformity
Portability
Must be easy to carry or conceal
If overly supplied, it will lost its value, in order to maintain, there needs to be limited supply of money
must be valued and widely recognized as a legal way to pay for goods and services
needs to last for a long period of time in order to maintain its value
to be a valued medium of exchange, it must be divisible
to be a measure of value, all same value needs to the exact same