Money

Representative money has value because it can be exchanged for a valuable good.

- Allows currency to be traded for a commodity such as gold or silver - Was used in systems involving a "gold standard" or "silver standard"

Types of money

- Commodity money - Representative money - Fiat money

Fiat money has its value guaranteed by a government.

- Has a value that is influenced by exchange rates - Can change in value because of government regulations

Commodity money has value because it is made with a valuable object.

- Often includes gold or silver. - Was the most common form of money in the past

Each nation's currency has a changing value relative to other currencies.

- This is referred to as a currency's exchange rate. - This value changes based on many factors.

In accounts:

- we can use credit or debit cards. - we can use store and transfer money using banks and financial institutions.

In hand:

- we use cash and coins.

barter

a system relying on trade as opposed to money

money

a type of currency with value that is used to exchange for goods and services - Replaces the need to barter - Allows citizens to have a portable measure of value

currency

he form of money, such as paper bills or coins, within a financial or economic system

liquidity

the ability to quickly convert to cash

circulation

the circular movement of currency, cash money, within an economic system

exchange

to trade goods and services