UNIT 11: MONEY AND ITS FUNCTIONS Flashcards
How many main ideas are there in unit 11: money and its functions?
I will summarize Unit 11. Unit 11 is about money and its functions. In my opinion, there are 3 main ideas:
1. Firstly, it talks about the DEFINITION of money.
2. Secondly, it talks about FUNCTIONS OF MONEY:
- Money as a MEDIUM OF EXCHANGE
- …MEASURE OF VALUE( UNIT OF ACCOUNT):
- …STORE OF VALUE
- …STANDARD OF DEFERRED PAYMENTS:
3. Thirdly, it talks about KINDS OF MONEY:
- COMMODITY MONEY:
- TOKEN MONEY:
what is the concept of “money”?
money is a commodity accepted by general consent as a medium of economic exchange.
what are the/four functions of money?
They are
- MONEY AS A medium of exchange
- measure of value
- Store of value
- Standard of deferred payment.
what is a medium of exchange?
is anything that is widely accepted in payment for goods and services and in settlement of debts
how is money used as a medium of exchange?
people buy or sell goods in exchange for money. money is a medium through which people exchange goods and services..
What is the most common medium of exchange?
Money
how is money used as a measure of value/ a unit of account?
-money is used to measure the value of goods and services in its units of account.
What is a measure of value/ a unit of account?
it is the unit in which prices are quoted and account are kept.
how is money used as a store of value?
As a store of value, money is used to make purchases in the future.
How is money used as a standard of deferred payments?
AS A STANDARD OF DEFERRED PAYMENTS, money is used to settle debts in the future.
what do you think is the most important function of money? Why?
I think a medium of exchange is the most important function of money.
Because it helps all transactions would be easy and save time.
without this function, other functions would not be done.
What are two main types of money?
They are commodity money and token money.
What is commodity money?
COMMODITY MONEY
- is a useful good that serves as a medium of exchange.
- value of CM = (is about equal to) value of material contained in it.
Can you give some types of token money?
BANK note, credit card
What is token money?
TOKEN MONEY:
-is a means of payment
-value or purchasing power greatly exceeds its cost of production.
summarize unit 11: money and its functions
I will summarize Unit 11. Unit 11 is about money and its functions. In my opinion, there are 3 main ideas:
1. Firstly, it talks about the DEFINITION:
- money is a commodity accepted by general consent as a medium of economic exchange.
2. Secondly, it talks about FUNCTIONS OF MONEY:
- MONEY AS A MEDIUM OF EXCHANGE: is anything that is widely accepted in payment for goods and services and in settlement of debts.
- MONEY AS A MEASURE OF VALUE( UNIT OF ACCOUNT):
-money is used to measure the value of goods and services in its units of accounts.
-the unit of account is the unit in which prices are quoted and accounts are kept.
- MONEY AS A STORE OF VALUE: money is used to make purchases in the future.
- MONEY AS A STANDARD OF DEFERRED PAYMENTS: money is used to settle debts in the future.
3. Thirdly, it talks about KINDS OF MONEY:
- COMMODITY MONEY:
-is a useful good that serves as a medium of exchange.
- value of CM= value of material contained in it.
- TOKEN MONEY:
-is a means of payment
-value or purchasing power greatly exceeds its cost of production.
(Nguồn tham khảo: tài liệu do Giảng viên Phạm Thị Thu cung cấp)
what are some main differences between commodity money and token money?
What determine the value of commodity money?
The value of material contained in it
Which national currency is the strongest currency? Why?
This is USD.
Because:
- it is used widely in international transaction
- it is one of the major reserve currencies in the world
is gold money?
yes it is. because it fully performed 4 functions of money
