POB paper 2 Flashcards
What is money?
Money is a medium of exchange that is widely accepted in transactions
Functions of money
store of value
unit of account
medium of exchange
standard of deferred payment
Characteristics of money
durability
portability
divisibility
uniformity
asseciblilty
what is barter?
is the exchange of goods and services without the use of money.
what is a medium of exchange
a medium of change is an item or asset that is widely accepted in transactions for goods and services
what is the money of intrinsic value
money of intrinsic value refers to a currency that has value in and out of itself.
what is commodity
it is a basic raw material or primary agricultural product.
types of money
coins
bank notes or paper notes
bank deposits
near money
what is a free market economy
it is defined as a system where people buy and sell freely without much control from the government
features of the free market
private ownership
supply and demand
competition
advantages and disadvantages of a free market economy
adv-there is freedom from government interference
disadv-the system leads to inequalities of wealt
other functions are
barter
commodity money
money of intrinsic value
representative money
fiat money
near money
