EMS: History of Money Flashcards
Traditional societies:
In economics, traditional societies refers to ….
Societies that did not have money and were largely self-suffcient.
Which means?
They provided for their own needs, such as shelter, clothing, food, etc.
Examples of traditional societies.
The San people of southern Africa and the Inuit people from northern Canada.
Bartering:
Over time, most of these societies moved from being what to what?
Hunter-gatherers to subsistence farmers.
When they produce a surplus of goods or animals, they would …
Exchange or trade with other farmers for different products.
What is bartering?
Trading one product for another where no money is used.
Promissory Notes:
IOU stands for?
“I owe you”
Sometimes when someone wants for buy something from a friend but they do not have money at the time, they….
May write an IOU on a piece of paper, where they promise to pay that amount to their friend.
The friend then keeps this letter/paper as a ….
record of the money owed to him.
Promissory notes are similar to an IOU, but …
More formal or official.
They are notes of ….
Agreement between 2 people, where the one promises to pay a certain amount of money by a certain date, or on demand.
The notes are usually signed …
By 2 people and have an official stamp.
The original promissory notes were used before …
The days of money.
Farmers would ‘pay’ what to the landlord?
Rent for the land they used.
Farmers would ‘buy’ what from the landlord?
Seeds, using promissory notes.
The farmer would sign a promissory note , promising …
To pay the landlord with the crop once it has been havested.
Once paid, the promissory note would be …
Cancelled
Banks still use promissory notes today in the form of an …..
Agreement
When someone wishes to buy a house for example, they have to ….
Sign a document with the bank for the loan they are making.
In the document it states….
How much they owe, by when the amount needs to be paid and any other terms of the loan.
Coins:
As people started trading with others from faraway places or other countries, it became more difficult to …
Barter with products.
What did they need?
Someting small that they could carry easily to trade with.
They also needed to use something that …
Everyone wanted.
The very first form of money were items such as …
Pieces of fabric or a certain weight of salt.
In some coastal areas, people used a …
Seashell called a cowrie shell.
They only problem with the cowrie shells was …
That people could pick up cowrie shells on any beach.
So cowrie shells became ….
Of no value.
Metal coins were later intoduced because …
Metal had value.
The ruler of that country would have his own….
Seal put onto each coin.
The coins also did not have to be …
Weighed, as the coins were accepted at their face value.
Today we still use what to produce coins?
Metal alloys
Paper money:
Over a thousand years ago who were the first to begin using paper money.
The Chinese
Paper money was only introduced to who about 300 years ago?
Europe
It meant money could be made out of something that was not …
Very valuable.
Paper money had to be guaranteed by the …
Government of that country that proved that for every bank note printed the country has that much money in gold or silver.
Ohterwise bank notes would be printed in ..
Abundance and would be worth nothing.
This was known as the ….
Gold standard.
Name an example of the Gold standard.
A R20 note could be exchanged for gold worth R20.
All countries has their own …
Currency as their legal tender.
South Africa’s legal tender is the …..
Rand and cent
And only these may be use in ..
Our country to buy goods and services.
When visiting another country, you need to …
Exchange your currency for the same value in that country’s currency.
In South Africa, all bank notes have the ….
Signature of the governor of the Reserved Bank on them.
This signature is
Our government’s guarantee of the value of the note.
Name 5 security features on our bank notes.
- Security thread - The shiny strip on the bank note which is a broken line until held up to the light.
- Watermark - The face of Nelson Mandela is seen when held up to the light.
- Colour changing ink - The big 5 animals on the bottom of the note has a spin circle feature that changes colour when tilted.
- Tactile marks - These have been added to support the blind and partially blind communities.
- Microprinting features - Printing of very small details onto a banknote. These details are usually tiny letters or patterns. It is visible only with magnifying devices. It can be seen with the naked eye as a thin continues line.
Electronic banking:
Electronic banking, also known as
EFT - Electronic fund transfers
Electronic banking uses computers and electronic technology and divices to make …
Transactions
It is predicted that one day in the future we will be a ….
Cashless society
Where payments are only made by …
Bank cards or EFT
What is the advantages :
- You do not have to stand in bank queues.
- You can do your banking after hours from your home or anywhere else.
What does ATM stand for?
Automatic teller machines
The role of money:
There is a saying ….”Money makes the
World go round
Most important functions of money:
- It is accepted by all people as a means of payment when trading.
- It is easy to carry.
- It enables pricing (in other words, products in shops can be given a value that people understand and can compare with other prices at other shops.
- It enable people, businesses and countries to measure their wealth. They each need to know what they are worth so they know how much they can afford to spend. Governmenst need to know whether its economy is growiing, and the economy can only be measured in terms of money.
- it makes it possible to save.
- It makes if possible for people to earn wages of salaries. Workers can put a price on labour.
However there is another saying ….. “Money is the
Root of all evil.
If there was no money there would be no ….
Greed and crime
