FUNDAMENTAL CONCEPT OF MONEY Flashcards
anything that gives you wealth, which means financial resources in general other than the cash that we have.
MONEY
It is the primary means through which we exchange our resources as well as the instrument through which we acquire our basic necessities.
MONEY
merely an instrument by which he is able to obtain or control wealth.
MONEY
IS MONEY = WEALTH?
FALSE
money is useful only in the sense that other things can be acquired in exchange for it. (TRUE / FALSE)
TRUE
consists of a stock of useful things that are of value.
WEALTH
if all the savings of an individual are in a form of money because of his preference for its liquidity, his wealth that he would possess would depend entirely upon the amount of goods and services that his money will be able to command in exchange at a particular time, taking into consideration the?
PURCHASING POWER OF MONEY
TIME VALUE OF MONEY
STAGE WHERE: They obtained what they needed in terms of their basic necessities directly from their natural environment. They gathered and harvested fruits and vegetable which were available in abundance in nature, fished in streams and rivers, and hunted wild game in the forests and the woods. They acquired their primitive needs— which were mainly bare necessities—from wherever they can be found.
individual self-sufficiency / DIRECT APPROPRIATION STAGE
STAGE WHERE: Knowing that although abundant, the
resources available in his environment were inherently scarce, it did not take long for him to realize that instead of producing all the things that they needed, it was practically more convenient to exchange some of the things they had with other things that they needed but they didn’t have—which other people had in abundance.
BARTER SYSTEM
means the direct exchange of goods with other goods, of services with other services, of goods
with services, and vice versa.
BARTER
important category of transaction costs that impose severe limitations on economies lacking money and thus dominated by barter or other in- kind transactions. The problem is caused by the improbability of the wants, needs, or events that cause
or motivate a transaction occurring at the same time and at the same place.
DOUBLE COINCIDENCE OF WANTS OR DESIRES
STAGE WHERE: Early in his bartering days, man learned that certain commodities were more acceptable by others in exchange for their goods and services since these were usually the more beautiful and more useful goods, while others were desired
because they were scarce.
USE OF COMMODITIES AS MONEY
STAGE WHERE: Because of the difficulties inherent in the use of commodity moneys, men felt the need for some other mediums of exchange that did not give them the inefficiencies and inconveniences encountered with commodity money.
USE OF CREDIT MONEY OR PAPER MONEY
