Money, Banking and the Federal Reserve.

1
Money, Banking and the Federal Reserve.

• Unit Seven

2
The Barter System

• Mutual Coincidence of Wants Each party has
  exactly what the other needs and is willing to
  trade.

3
Money is What Money Does! The Three Functions of
Money

• Medium of Exchange Money is accepted by
  people when they buy and sell goods service.
• Store of Value Money is a way of storing
  value from the time when people receive it until
  another time when they spend it.
• Measure of Value Money is like a yard
  stick. People use it to compare the worth of
  things that they buy and sell.

4
Four Major Types of Money

• Commodity Money
• Fiat Money
• Specie
• Paper Currency

5
Five Characteristics of Effective Money

• Portable
• Durable
• Divisible
• Acceptable
• Limited in Availability