The History Of Money Flashcards
Learn about how money came about and how it's developed
What did people do to get what they wanted before there was money
Trade
What is another word for trading
Bartering
What are promissory notes
Legally binding notes that buyers use to promise sellers unconditionally that they will pay specific amounts of money within a specific time.
What are some disadvantages of bartering
. Not everything is of the same value (lack of common measure of value)
. Difficult to determine a commodities value (are a dozen eggs worth 2 meters of cotton cloth)
What where some early forms of currency
Receipts representative of stored commodities eg grain
Cowrie shells
Ivory
Metal ingots
Why did people start using metals as currency
Metal lasts longer and has value
Why did people start using notes and not just coins
They are lighter and have more value (imagine going to the shop and buying all your products with R2 coins)
We say that paper money is….
Representative
What century did China start using banknotes
7th century
What century did Europe start using banknotes
14th century
What were the earliest forms of money
Livestock and crops
Where was shell money used
China, Arabia, Africa
Where was spade and knife used
China
Where were the first banknotes and what were they made of
China
White deerskin edged in colors
When was the end of the gold standard system
1971
What forms does money take today
Coins
Paper
Plastic
Electronic
Why was electronic banking invented
. People didn’t have to carry so much money around so there was less of a risk
. They don’t have to deal directly with cash
What is money
A current medium of exchange
What is a modern society?
An industrialised society that uses technology to produce products for trade
What is a traditional society?
A society where basic methods are used to hunt for and harvest food. There is no technology and most activities are for subsistence.
What is bartering?
A form of trade where people exchange goods without money
Define commodities
Items that people use for trade
What is currency?
A medium of exchange
What are the 3 roles of money
. Medium of exchange
. Unit of account
. Store of value
What does money is a medium of exchange mean
You can use it to buy goods and services by trading it for those goods and services.
E. G. you exchange money you have for food in a supermarket
What does money is a unit of account mean
It is a standard measure of how much goods and services are worth
What does money is a store of value mean
It holds its value over time
