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Report in Basifin

Jian Carla Arboleda

on 7 July 2013

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Transcript of Money

투자원칙 1
투자원칙 2
투자원칙 3
Function of Money
Barter Systems
Traditional Characteristics of Money
Classification of Money
Money can be defined as anything that people regularly use to buy goods and services from other people. It can be anything accepted as a means of paying for goods or services or for paying off debts.
Money has one fundamental purpose in an economic system: to facilitate the exchange of goods and services to lessen the time and effort required to carry on trade.
Functions of Money
As a medium of exchange
As a standard of value
As a store of value
As a standard of deferred payment
As a reserve guaranty for solvency
Difficulties encompassed in a Barter System:

1) tends to slow down trade
2) lack of double coincidence of wants
3) lack of a proper way to equate the values of the things exchanged
4) indivisibility of some goods
Traditional Characteristics of Money

General Acceptability
Classification of Money
the object or commodity could be used not only as money but in its own original form
the object or commodity must be of general acceptance so that common usage of it would allow it to be transferred without questioning
the commodity should be easily carried or transported from place to place
money should come from homogenous object and it can be achieved through the use of standard and uniform metal or paper
the commodity used as money could be melted down and shaped into different forms as well as imprinted with any desired design
the commodity chosen as money would have to withstand normal wear and tear
use as the payment for products and services you purchase
without it, modern economies could not function
money isn't just pieces of paper, it's a medium of exchange that facilitates trade
The first actual coins were
minted in Lydia about 500 B.C.

The first paper money was in
China about 960 A.D.

Pagoso, C. (2008). Money, Credit and Banking. Manila: Rex Bookstore.
Definition of 'Barter'

the act of trading goods and services between two or more parties without the use of money

useful for parties that don't have a strong cash position that would normally be used to pay for goods or services
Group #3

Jian Arboleda
Jazzcent Bigay
Kenneth Hosmillo
Eunice Pagcaliwangan
Ericka Mabini
Role and Uses of Money
I. Full-bodied money
II. Representative full-bodied money
A. Issued by government
1) Token coins
2) Representative token money
3) Circulating promissory notes
B. Issued by banks
1) Circulating promissory notes issued by
central banks
2) Circulating promissory notes issued by
other banks
3) Demand deposits subject to check
-- money whose value as a commodity for non-monetary purposes is a great as its value as money
-- principal full-bodied money in modern monetary systems has been coins of the standard metal when a country is on a metallic standard: a gold standard, a silver standard or a bimetallic standard using gold and silver
Full-Bodied coins were typically issued by governments. Three steps are involved:

1] Define the gold value of the monetary unit
2] At the stipulated price, purchase all the metal that is
offered and coin it without limit and virtually without
3] Permit the melting of coins to get gold for non-monetary
uses and stand ready to sell entire commodity
-- usually made of paper. It is in effect a circulating warehouse receipt for full-bodied coins or either equivalent in bullion.
-- “represents in circulating amount of metal with commodity value equal to the value of the money”

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