Functions/ Characteristics of Money (Econ)
What is uniformity?
A standard form of payment
What is acceptability?
The confidence that the money can be constantly used.
What is divisibility?
When money can be split easily
What is portability?
When money is able to be carried easily
What is durability?
When money lasts for a while.
What is limited supply?
When there is not an abundant of printed bills (money is recycled, constantly used)
What is representative money?
Receipts that claim the person has "money"
Default
Failure to pay back loan
Characteristics of money
1. Durability 2. Portability 3. Divisibility 4. Uniformity 5. Limited Supply 6. Acceptability
Types of Money
1. Fiat 2. Commodity 3. Representative
What are the functions of money?
1. Medium of exchange 2. Store of value 3. Standard of value (unit of account)
What is commodity money?
Items that hold inherit value and can be used as money.
What is fiat money?
Money that has value because the government has decreed it as valuable
