MONEY AND makes it easy for people to

engage in trade because there is

no need to compare the value of

INFLATION
one product to another.

AS STORED VALUE
- Money also serves as a
storage or reservoir of
● Money refers to any tradable value. The value of money
object or instrument that may can be stored or kept first.
come in the form of paper,
coin, bonds, credit, and many
more. It is any form of object CHANGES IN VALUE OF
that may be used as a means MONEY
of exchange, standard value,
and store value. The change in value of money is
influenced by different factors like
KINDS OF MONEY people’s perspective, legal tender,
income, and interest on loans.
● COMMODITY MONEY- Refers to
an object that has an intrinsic INFLATION
value that may be used as a
means of exchange. -It refers to the increase in the
● REPRESENTATIVE MONEY- general price of products and
Refers to stamped money or services in the market.
physical certificates.
● FIAT MONEY- Fiat means an
order or law. Fiat money is called
legal tender, it represents a
value as mandated by the
government.

FUNCTION OF MONEY
DEFLATION
-Deflation is when consumer and
AS A MEAN OF EXCHANGE
asset prices decrease over time, and
- As a medium of exchange is
anything that can be used as a purchasing power increases.
measure of value for trade and Essentially, you can buy more goods
services. or services tomorrow with the same
AS STANDARD VALUE or UNIT OF amount of money you have today.
ACCOUNT
- All products have a
corresponding value. Money
MAJOR CAUSES OF INFLATION 6. POLICIES and REGULATION

- Certain policies can also result in

1. DEMAND-PULL INFLATION either a cost-push or demand-pull
inflation. When the government
- Demand-pull inflation happens issues tax subsidies for certain
when the demand for certain products, it can increase
goods and services is greater demand.
than the economy's ability to
meet those demands. When this EFFECT OF INFLATION
demand outpaces supply, there's
an upward pressure on prices —
causing inflation.
2. COST-PUSH INFLATION

- Cost-push inflation is the

increase of prices when the cost
of wages and materials goes up.
These costs are often passed
down to consumers in the form of
higher prices for those goods and
services. HOW CAN WE SOLVE
INFLATION?
3. INCREASE MONEY SUPPLY
Reducing government spending,would
- If the money supply increases
tamp down on demand-fueled inflation,
faster than the rate of production,
while at the same time restoring
this could result in inflation,
confidence in the ability of the federal
particularly demand-pull inflation
government to pay down the debt and
because there will be too many
thus control inflation expectations
dollars chasing too few products.

4. DEVALUATION

- Devaluation is downward
adjustment in a country's
exchange rate, resulting in lower
values for a country's currency.

5. RISING WAGES

- The rising wages allow

consumers to pay higher prices
without impacting their
purchasing power