FMGT 65 Flashcards
What is the mode of payment in 9000 BCE?
Exchange of excess products like cattle and agricultural products
What are the people of Near East writing in around 8000 BCE?
Record of agricultural production and other commercial transactions
When did the Mesopotamian civilization’s writing system became increasingly formal?
Towards the end of 4000 BC
When is the apparent banking system first appeared in 4000 BC according to Neil Fergusson?
Babylonia
What is the earliest kind of commodity money?
Clay tablets
This was supplanted by commodity money
Bartering
These are found in Indian Ocean and started to be used as legal tender and, therefore, a recognized form of commodity money in China about 1500 BC
Cowry shells
Around 1000-200 BCE, the Chinese employed these as a form of commerce
Spherical metal coins and small bronze
These are first created in Lydia about 560 BCE
Crude Coins
Macedonian King Alexander the Great set the silver to gold ratio at what ratio?
Ten to one ratio
They started minting and circulating silver coins in 269 BCE
Rome
Where was the first paper money created and utilized?
China
In 1860, Western Union introduced the first what?
telegram-based electronic money transfer
What is the first credit card that was created by John Biggins in 1946?
Charge-it-card
When does Bitcoin and cryptocurrency first appeared?
2009
What are the types of money?
Fiat, commodity, representative, fiduciary, and commercial bank money
What are the functions of money?
- A medium of exchange
- Unit of account
- A store of value
The ability to trade goods and
services is money’s primary and most significant application.
It acts as a means of exchange that enables individuals who
use it to readily get what they need since it is a widely
recognized form of payment.
A medium of exchange
Money works as a shared benchmark for
determining the worth of goods and services by serving as this. It is reliable and makes it simple to compare
the value of a $1 Coke to a $50 chair. However, it would be
more difficult for me to comprehend their values if I had to
pay for the drink with pencils and the chair with apples.
Unit of account
Additionally, money has to be this, which means it must hold its value over time. It must
be functional as a trustworthy means of trade and be able to
be saved, stored, and retrieved. I couldn’t “Stack My Apples”
and keep becoming richer if I exchanged a lot of chairs for
apples. They would eventually be worth LESS when they
become brittle and WORTHLESS when they get spoilt.
A store of value
What are the features of money?
- Fungibility
- Divisibility
- Robustness
- Portability
- Recognizability
- Value stability
- Limited supply
if it may be used in
place of other forms of payment. For instance, despite any
stains or rips, every $1 note is valued the same as every other
dollar bill. In trade, a damaged apple would not be
equivalent to an unbruised apple.
Fungibility
Possibility of division. Ex: Four equal quarters
may be made from a $1 note.
Divisibility
It must be able to endure the abuse that
comes when it goes from hand to hand.
Robustness
It ought to be simple to carry and move about
Portability
Its worth must be clear to understand. A $1
note is designated with a “1,” whereas a ten-dollar bill is
designated with a “10.” You can quickly assess and contrast their
value.
Recognizability
