Money

• Economie
• Voortgezet speciaal onderwijs

Money

Four functions

Medium of exchange

- Something that is used to make sale and trade easier.

Measure of value

- Used to compare the values of different things

Four functions

Store of value

- Something that has a value that can be stored and used later without it losing a lot of value

Means of deferred payment

- It can be used to get something now but pay later

Six characteristics of money

1. Durability 
   
2. Portability
   
3. Divisibility
   
4. Uniformity
   
5. Limited supply
   
6. General acceptance
   

Durability

The durability of money is that it can be used over and over. It is adapted to survive tear for a long time of period. But nowadays we also have online money which has a unlimited durability.

Portability

Portability is that money must be very easy to transport everywhere. But for bigger payments internationally it is not useful to take an extreme amount of paper money with you. That is why online is useful these days

Divisibility

Divisibility is the aspect of money that it can easily be divided. That is also why there are different values of money paper so you can pay small prices easier.

Uniformity

Uniformity is the fact that every paper money (with the same amount) will look the same. It will look different if it is in a area with different money. But still the value will be written on the paper.

Limited supply

Money always has a limited supply so that it will keep it’s value. If there would be unlimited money on the world, then the money would be worthless

General acceptance

The fact that everyone in a country will accept euros, means that they have general acceptance in that country.

Tangible & intangible money

Tangible money

- Money that can be touched like paper money and coins

Intangible money

- Money that can’t be touched. For example money on the bank/credit card

Fiduciary

A person who has the job to act in your best interest. Their advice must be suitable for your financial situation

Fiduciary money

- Is not declared legal by the government. Examples of fiduciary money include cheques, bank notes, or drafts.

Intrinsic and extrinsic value

Intrinsic value

- The actual value of for example a coin or bank note

Extrinsic value

- The value given to the coin or bank note, eg. 1 euro

Quiz

What is not a characteristic of money?

1. Divisibility
2. Paper or metal
3. Limited supply
4. Uniformity

Tangible money is money you can't touch

1. True
2. False

What is uniformity?

What were I.O.U.'s?

1. Islands own USA
2. Those are paper contracts between a store and a consumer
3. Those were the first forms of a lend
4. Those were the first form of paper money

Bonus question:
Is economics about money?

1. No
2. Yes
3. Maybe
4. We'll never know