unit 3 the individual as -producer -consumer & -borrower

Unit 3

Money • Money is a medium 方法 of exchange

used to buy goods and services.

What is Money?Money is anything that is generally accepted in

payment for goods and services

Money is NOT the same as wealth or income Wealth is everything a person owns that has value

Income is earnings per unit of time

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Types of Money:Coins & NotesDebit cards & Credit cards.

The Functions of Money• A way to exchange or trade• a unit of account 计价单位 (tells us

the value)• a store of wealth 丰富的卖场 (save

money in the bank)

Why do we use money?What would happen if we didn’t have money?

The Barter System 易货系统 : goods and services are traded directly. There is no money exchanged.

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Why do we use money?What would happen if we didn’t have money?

Problems:1. Before trade 贸易 could happen, each trader had

to have something the other wanted.

2. Some goods cannot be split. If 1 goat is worth four chickens, how do you trade if you only want 1 chicken?

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A BANK is a financial Institution involved in Money transactions

2 types of Banks

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The central bank is responsible for supervising a country’s banking system?

1. Central Bank•China - People’s Bank of China

•UK – The Bank of England

•USA – The Federal Reserve Bank

In China

People’s Bank of China

Agricultural Bank of China

China Construction Bank

Bank of communications

Commercial banks want to make profit!!!

2. Commercial Banks

商业银行

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Functions of the central bank (p.120)

• THE GOVERNMENT’S BANK

• (1) Makes notes and coins

• (2) Manages the national debt• (3) Manages the countries gold and foreign

currency reserves 外汇储备

Stock Exchange

“A Market where Stocks can be bought and sold is called a Stock Exchange”

Stock Exchange

Companies that are allowed to sell Stocks are called Public limited Companies

Stock Exchange Functions of the Stock Exchange:To help raise capital (money) for public

limited companies

The New York Stock Exchange New York, USANASDAQ New York, USATokyo Stock Exchange Tokyo, JapanHong Kong Stock Exchange Hong KongLondon Stock Exchange London, UKShanghai Stock Exchange Shanghai, ChinaFrankfurt Stock Exchange Frankfurt, GermanyBombay Stock Exchange Mumbai, India

Stock Market

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A bear marketShare price index

Stock market prices are falling

A bullish marketShare price index

Stock market prices are rising

• How do big business’s raise capital (money) to grow?

• They sell stock

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Why is the stock market important?

In which way do commercial banks earn profit?

A.By charging more to lend money than they pay to borrow it

B.By paying more to borrow money than they charge for lending

C.By minting coins

D.By printing notes

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In which way do commercial banks earn profit?

A.By charging more to lend money than they pay to borrow it

B.By paying more to borrow money than they charge for lending

C.By minting coins

D.By printing notes

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Which type of bank is responsible for supervising a country’s banking system?A. A saving bankB. An investment bankC. commercial bankD. Central bank

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Which type of bank is responsible for supervising a country’s banking system?A. A saving bankB. An investment bankC. commercial bankD. Central bank

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What is the main aim of a commercial bank?

A.To act as banker to the government

B.To issue bank notes

C.To make a profit

D.To manage the national debt

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What is the main aim of a commercial bank?

A.To act as banker to the government

B.To issue bank notes

C.To make a profit

D.To manage the national debt

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In which type of business organization are shares sold on the stock exchange?

A.Sole proprietor

B.Partnership

C.Private limited company

D.Public limited company

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In which type of business organization are shares sold on the stock exchange?

A.Sole proprietor

B.Partnership

C.Private limited company

D.Public limited company

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Stock Market Exercise

Work in teams. You have 30 minutes.

•Using your phone or pad search the internet for the best stock to buy in China, then prepare a 3 minute speech why you choose those stocks.

•1 person from your group will present

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Stock Market Exercise

Work in teams. You have 30 minutes.

•You need to have reasons why you choose your stock. If anybody say’s I just liked this one, I will ask you to sit down.

•We will vote for the best stock and presentation at the end of class

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