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Warm Up #23Answer the questions to the following video.

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Class Confession

We the Senior Class of 2016 will complete ALL of our assignments to best of our abilities and behave appropriately in class.

We will respect all faculty, staff, substitutes, classmates, and especially Mr. Wilcox.

We will graduate on time May 20, 2016 and become productive citizens in society.

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SSEMI1b.Explain the role of money as a medium

of exchange and how it facilitates exchange.

Determine and define vocabulary. Identify key terms within the standard. Define each term.

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Scaffold understanding of the standard(s) and/or element(s). Paraphrase the standard(s) and/or element(s). Rewrite the standard including synonyms or brief definitions in parentheses and in a different color following the key terms found in step 1.

Explain (clarify) the role (part) of money (funds) as a medium (middle) of exchange (interaction) and how it facilitates (helps) exchange.

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Money: Its Functions and Properties

SSEMI1bExplain the role of money as a Explain the role of money as a

medium of exchange and how it medium of exchange and how it facilitates exchange.facilitates exchange.

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What is Money?

Money is anything that people commonly accepted in exchange for goods and services.

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What functions does money serve?

Medium of exchange

A standard of value

Store of value

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Medium of Exchange

Any item that sellers accept as payment for goods and services.

Barter—exchanging goods or services for other goods or services

–inefficient: both people must want what the other one has to exchange

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Standard of Value

Provides people with a way to measure the relative value of goods and services by comparing their prices.

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Store of Value

It can be saved, or stored for later use.

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5 Characteristics of Money

AcceptabilityDivisibilityDurabilityPortability

Stability in Value

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Acceptability

People are willing to accept money in exchange for their goods and services.

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Divisibility

Ability of money to be divided into smaller units.

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Durability

Ability to be used over and over again, and can withstand wear and tear.

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Portability

Ability to be carried from one place to another and transferred from one person to another.

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Stability in value

Must be stable in value

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3 Types of Money

A. Commodity Money• An item that has a value of its own

–Ie. Gold and silver (specie), diamonds, etc.B. Representative Money

• An item that has value because it can be exchanged for something else of value–Ie. Bills that were redeemable for gold or

silver.C. Fiat Money

• A government decree says that it has value.–Ie. Coins and paper money in the U.S.

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What forms of money does the U.S. take?

A. Coins and Paper MoneyB. Demand Deposits

1. Checking accounts (“on demand” at any time)

C. Near Money1.Savings accounts2.Time deposits

a. CD’s & Bonds

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Closure Activity #22

Suppose that you and your classmates decide to establish a monetary system for you school’s money. What will you use as currency? Explain why you chose that item, why it functions as money, and how it matches the characteristics of money.

10 mins.

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Show What You Know!

Georgia Milestone Practice QuestionWhen people put money in a savings account, money isserving as aA. Store of valueB. Medium of exchangeC. Standard of valueD. All of the above

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Show What You Know!

Georgia Milestone Practice QuestionIf the smallest unit of U.S. money was the $100 bill, whichcharacteristic of money would it not meet?A. DurabilityB. PortabilityC. DivisibilityD. Acceptability

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Show What You Know!

Georgia Milestone Practice QuestionWhat is the system of exchange that does NOT involvemoney?A. HagglingB. BarterC. Free exchange systemD. Debit exchange system

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The End

Any Questions?Any Concerns?Any Comments?Any Questions?Any Concerns?Any Comments?Any Questions?Any Concerns?Any Comments?

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Chapter 10 Money Quiz Tomorrow!

MoneyMedium of exchangeBarterStandard of valueStore of valueDurabilityPortabilityAcceptability

Commodity MoneyRepresentative Money Fiat MoneyCurrency Demand depositsNear moneyDivisibilityStability in value