Money, Money, Money

In all economic systems people trade, or EXCHANGE, goods and services. The simplest form of exchange was bartering.
But, what are problems arise with bartering? You need to have exactly what other person wants. Its hard to know what one thing is worth compared to another. You cant always save to trade at a later date.

But in many parts of the world people began to use different forms of money to help in their exchanges

So, Why do we use money? 1. Money makes the exchange of goods and services
easier! 2. Money helps assign a value to things. We can measure the worth of goods and services. 3. Money can be useful as a store of value. It will hold its value over time..

Characteristics of money
We want our money to be:
A. B. portable (easily carried from place to place) divisible to make large and small transactions

C. D.

Scarce (money should be limited or it will lose value) Durable (must be able to stand up to hard use)

What are the TYPES of Money?

1. Commodity money - money actually has value -ex, gold and silver 2. Fiat money -money that is assigned a value (by the government) -currency and coin for example 3. Representative money -money that represents something a. Personal Checks b. Travelers Checks