History Of Money Flashcards
Did the San bushmen need money?
No, they were self-sufficient nomads, and met their own needs and wants.
What was the effect of the Khoikhoi people moving to Southern Africa about 2000 years ago?
They exposed the San to a different way of life. Some of the San worked for the Khoikhoi and they also intermarried.
How were the Khoikhoi different from the San in their lifestyle?
Khoikhoi were herders. Their cattle was a sign of wealth, and played an important part in their rituals and social life.
They only killed cattle for special occasions.
Who did the Khoikhoi trade with, and what for?
Europeans
Wants: alcohol, beads, copper
What effect did the trading have on the Khoikhoi?
They lost much of their wealth.
They then started to steal from the settlers, leading to many wars.
When did people start bartering?
Once the first farmers settled in Southern Africa.
What were the disadvantages of bartering?
Difficult to determine what is equivalent to each product
Difficult to find someone with what you want who is interested in what you have to offer
Time-consuming, as a result of the above
What did the disadvantages of bartering lead to?
The development of commodity money.
What is commodity money?
Certain items, like shells and cattle, that were used as a form of money during the trading process.
What factors affected the type of commodity money?
Location of community
Cultural standard of the people
Economic standard of the people
Where did people use Cowry shells as money?
Ancient China and Africa.
Where did people use skins and furs as commodity money?
Alaska and Siberia (cold places)
What is bride money?
Similar to lobola (cattle)
What changed commodity money to metallic money?
Discovery of precious metals like gold, silver, copper, bronze, etc
Why were promissory notes developed?
Before there were banks, people needed a way to keep their gold safe since it was too heavy to carry.
Merchants would look after the gold, and give the notes ‘promising’ gold in exchange for the gold.
What did promissory notes develop into?
Paper money or banknotes.
Where did banknotes first start being used?
China since the Chinese invented paper
When were bank notes first used in Europe?
18th and 19th centuries.
Why were metals suitable as coins?
Scare
Durable
Could be easily divided into coins of various sizes.
Hole can be made in middle to string together if required.
When was money first printed in South Africa?
1803
When was British money used in South Africa?
Between 1841 and 1960
When did rands and cents start being used in South Africa?
1961 once South Africa became a republic.
What is electronic banking?
Using the Internet to move money
What are the advantages of electronic banking for a client?
Saves time - don’t need to stand in a queue or go to a shop to pay bills
Account and banking can be done after hours
What are the advantages of electronic banking for the bank?
Fewer tellers needed in the bank, so fewer salaries to pay
Lower printing costs and lower requirement for paper (environmentally friendlier)
Less fuel used since people don’t need to travel to the banks (environmentally friendlier)
What are the four main roles of money in society?
Medium of exchange - makes trade easier
Unit of account - easier to compare value of one item with another
Store of value - can be saved for future use since value stays similar over long period
Standard of future payment - people can buy on credit and settle he account in the future
What characteristics does money need to be an effective medium of exchange?
Item used as money should be relatively scarce
Needs to be durable
Needs to be portable
Needs to be divisible (easy to divide into smaller parts, and to give people change).
How is the value of the rand determined?
By quantity of goods and services that has been produced in our markets.
What has an impact on currency?
Productivity and entrepreneurship
