1.1 The development of money Flashcards
1
Q
barter system
A
a system to trade goods of services, that relies on a ‘double coincidence of wants’ + agreeing a rate of exchange
2
Q
3 drawbacks of barter system
A
-rate of exchange agreement
-double conscience of wants
-time consuming
- need to have a surplus
3
Q
intrinsic values as payment
A
- an item that everyone agrees is a valued means of payment
- ( value in its own right)
- traced from 9000-6000 BC
4
Q
drawbacks of early forms of money
A
not durable
not divisible
not all easily portable
value can vary overtime
5
Q
metals (gold)
A
used to make weapons, lead to coins
6
Q
represent value
A
has no (intrinsic) value, just represents (coins)
7
Q
paper notes
A
(were written receipts), use it for payments of their own
8
Q
modern payments
A
coins/cash
electronic accounts
barter systems: LETS
