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