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Loida Sarmiento

on 10 October 2013

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Transcript of Money,

Significance of Money
* It serves as a medium of exchange-money facilitates exchange of goods and services.

* It serves as a standard of value-measures the relative value of goods and services.

* It may serve as a store of value-money can be stored for future .

* It serves as a standard of deffered payment-measures the obligations of barrowers to the creditors.
It's Evolution
and Significance

design by Dóri Sirály for Prezi
Monetary System
Barter System- It is the direct exchange of goods for goods, services for services and goods for services or vice versa
Evolution of Money

coins was the first type of modern money which is made by the goldsmiths. They also accepted gold deposits for safekeeping, which were returned in another precious metal of the same value. They also helped in the transfer of precious metal by means of receipts .This receipts were issued to represent the gold deposits. These receipts were interest bearing. Originally, a goldsmith was being paid a storage fee for the gold but when people came to know that the goldsmith was making money out of the gold deposits, they required him to share with them a part of the interest he earned . This is how banking started.
Reasons why people abandoned the barter system
1. It saw difficult to look
for that person who has, the
things you need and who also wants the things you are offering for exchange.
4. Its time consuming, cumberson and very inconvenient for individuals to use the barter system
2.There is no common denominator to measure the value of goods and services sought for exchange

3. Most of goods traded have unequal values.
5. It lacks generalized purchasing power
Is anything used by the society as a medium of exchange, and is widely acceptable for the payment of good and services without questioning the integrity of the person offering it.
Minting of coins requires weighing and testing of each transaction for its quality. But because this method became cumbersome and interfered with the smooth flow of business, the goldsmiths, the kings, and the bankers stamped the coins to gave identity to the value of coins.
*The magnitude of the cost of converting an asset into money is an important concept known as LIQUIDITY.
3. As a store of value.
*The magnitude of the cost of converting an asset into money is an important concept known as LIQUIDITY.
1. As a medium of exchange.
2. As a standard to measure the value of goods and services.
Investment can be made in:
A. Business
Two ways of keeping money for future use
1. By Saving

2. By Investing
B. Corporate or government securities such as stocks and bonds
C. Money market
D. Real estate properties
E. Jewelries
Depositing it in a bank >Earn interest>Bank lends it to othersfor prodeuctive purposes>produce goods> Hire people>>>Production and Growth of the economy
A. Business

B. Corporate or government securities such as stocks and bonds

C. Money market

D. Real estate properties

E. Jewelries
Investment can be made in :
3 divisions of Investment

1. Industrial Business
2. Commercial Business
3. Servicing Business

4. As a means of deferred payment.
A. Business
B. Corporate or government securities such as stocks and bonds
C. Money market
D. Real estate properties
E. Jewelries

Investment can be made in:
3 divisions of Investment
1. Industrial Business

2. Commercial Business

3. Servicing Business
1. General Acceptability
3. Fiat Money
4. Legal Tender Money
8. Durability

it is the pocess of making uniform coins from metals and samping them wth a specific design as a guaranty of ots weight and fineness and the integrity of the country it represents.

The coin is the product of coinage. It is defined as a mass of metal cast in some convenient shape with a definite weight and fineness, which is guaranteed by the government and certified by the integrity of the design impressed upon its surface. Some authors also define it as a piece of metal of specified weight and fineness with a particular design and denomination intended as money.

Fineness is defined as the ratio of pure gold and silver to the total weight of the coin, The value of hte Philippine peso in 1934 was 12.9 grains of gold, 9/10 of which is pure gold and 1/10 of which is alloy.

Mint is place or a factory where coins are manufactured or minted. It is usually operated by the government

The actual manufacture of coins is done at the mint. The metals are cast into bars or sometimes - called ingots. The ingots are made into strips of thickness of desired coins. Blank coins are punched out of the strips of metal. After being punched out, the coins are rolled to produce their raised edge, which is called upset rim. This is done under a heavy pressure. Finally, the design is stamped on the blank coins.

The silver coins have grooves or reeding on their edges so it will be evident if any part of the coins has been shaved off.

Coins are made of metal alloys rather than pure metal so as to give them durability. The silver peso issued by the Treasury in 1934 contained 80% silver and 20% alloy. Denomination frim 10centavos to 50 centavos contain 75% silver and 25% alloy.

The intrinisic value of the metal in the coin is less than the face value of the coin or the value assigned to the coin.

Interesting facts about various types of money :
In China cowry shells are regarded as money during 1000 B.C to 1200 B.C.
Leather bags are treated as money in the ancient city of Carthage.
Copper coins are treated as money by Romans 600B.C.
Silver coins are treated as money by Ancient Persians between 600-300 B.C.
Gold Coins are treated as money in 600 B.C in Anatolia (Asian Turkey or Asia Minor )
Paper Money first appeared in China about 800 AD . In Europe, Sweden is the First country to issue Paper Money in 1661.
1. General Acceptability
2. Stability of Value
3. Portability
4. Cognizability
5. Divisibility
6. Homogenity
7. Elasticity
1. Commodity Money
2. Credit Money
a. Representative paper money
b. Fiduciary paper money

c. Bank note

Kinds Of Coinage
Gratuitous coinage or Free coinage
is a system where by money metals or metals may be brought to the government mint and converted nto standard money without any charge or any expense for minting except for the delay involved in the process.

is a kind of coinage where the fee charge by the government mint for metals made into coins is just sufficient to cover the cost of minting.

is a kind of coinage where the fee charge by the government is more than the cost of minting so here, the government earns a profit.

Limited coinage
is a system adopted by a country where by the government converts metals into coins, only at its option. Since there is no priviledge of free coinage in such a case, the coins are the result of what is known as limited coinage. Such coins normally bear a heavy seiniorage charge, or put in another way, their face value is considerabky greater the the valuw of the metal they contain.

Detecting Counterfeited Bills
1) STUDY the workmanship of each denomination of known geuine Central Bank Notes
2) Take note of and FAMILIARIZE yourself with the various characteristics of the following features:
1. Paper

2. Portrait

3. Watermar

4. Security Fiber
5. Security Thread
6. Background Design
7. Color of each denomination
8. Style and size of serial number
9. Vignette
10. Cleanness of print

1. Even flow of metallic grains

2. High relief of letter and numerals

3. Regularly of reeding and beadings

For Genuine:


The fingers can be readily feel the main prints on the fronts and back of the fairly new notes. This is brought about by the measurable thickness of the ink deposted on the paper, which gives the print an embossed effect


Appears life-like. The eyes "sparkle". The tiny dots forming the details of the face, hair, etc., are clear, sharp and well defined. Each portrait stands put distinctly from the background. This is very noticeable along shoulders.


The watermark is the same as the colored portrait. This design placed during the manufacture of the paper. Sharp details of the outline of the light and shadow effect are discernable when viewed with the aid.

For Counterfeit


Generally smooth. The fingers can hardly feel the main print even on new notes. This is due to offset printing, the most common process employed by the counterfeiters. Photo-counterfeits reproduced by photographic copyin generally feel "slimy", the "prints" are mere stains on the coating of the sensitized paper, which is glossy.


Appears "dead", dull, smugdy and poorly pronted. The eyes do not sparkle; the concentric lines depicting the eyes often merge intosolid printed areas. The hair strands are discernable. The portrait often blends with the background design due to lines , which are thick and rough. The multicolored prints on genuine notes are extremely difficult to duplicate and as a result, counterfeit notes are usually off-colo and not of right shade or tone

Justine Arboleda
Loida C. Sarmiento
Leonil Mallari de Guzman
Full transcript