History of Money1 Flashcards
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The ease/efficiency which a currency can be exchanged for products and services
What makes a good medium of exchange
Durability, Transportability,Divisibility, Fungibility & non counterfeit-ability
What is a unit of account?
A standard measurement of the value of goods, services, economic activities, assets and liabilities. (Stability)Imagine using Us and Jamaican dollars in Jamaica. Having mroe than one makes things complicated.
What is a store of value
Wealth can be saved and used for future use. Other examples - diamonds for example. Can’t be bananas because it would rot
What are the main functions of currency?
Medium of exchange, store of value, Store of value
What is Fungibility?
Interchangeable? I can exchange 10 Euros for a meal or for 11.38 US Dollars.
What is bartering?
trading goods or services directly, without any intermediary ‘medium of exchange
What were some forms of primitive money
Cowry Shells,Wampum belts,Cattle, Tobacco,Whales Teeth or Grain
What were the main advantages of modern coinage relative to primitive money?
More fungible ( interchangeable), durable,portable
Properties of Bitcoin as a currency
Private, Decentralized,Digital, Cryptocurrency
Currency has passed through the following phases, though long overlapping cycles exist
Barter, Primitive Money, Commodity Money, Fiat Money
Bitcoin and several other cryptocurrencies represent a new form of currency tha
Private, Decentralized, with a fixed algorithmic money supply Possibly commodity-backed
Bitcoin and several other cryptocurrencies represent a new form of currency
Private, Decentralized, with a fixed algorithmic money supply Possibly commodity-backed
Which of the following is an absolutely necessary characteristic of a fiat currency?
Fiat currency is not redeemable for a commodity
What is the double coincidence of wants
when two people have goods they are both happy to swap in exchange
