The Role Of Money Flashcards
What does money reflect?
How society has changed.
How has the simple barter system developed?
It has now developed into the worldwide use of money in different types of complex economies.
In the days of audience farming and bartering how was your wealth measured?
In how much land you own.
In the modern society how is your wealth measured?
In how much money you have.
When farmers began to harvest more crops than what was needed what did they create?
Surplus
What did they trade theses surpluses for?
Other commodities and eventually for money.
When people started trading goods for money, what did they do?
The people gathered in certain areas to make it easier for buyers and sellers to meet.
What did the sites at which buyers and sellers met at become?
Market places and eventually cities and towns grew around them.
What did this urbanization mean?
People could exchange ideas more easily.
When people traded ideas, what did it lead to?
Advancements in science,technology and philosophy.
What does money allow people to do?
Store the payment for their labor in a form that lasts for an indefinite time.
Name the four roles of money:
Medium of exchange
Unit of account
Store of value
Means of payment
What does it mean if money is a medium of exchange?
We can use it to buy goods and services by trading it for these goods and services.
What does it mean if money is a unit of account?
This means it is a standard measure of how much goods and services are worth.
What decision does the unit of account allow us to do?
Help make decisions on whether something is fairly priced or worth buying and how much of something we can afford to buy.
