MONEY: ITS USES AND

SIGNIFICANCE
Chapter 1
 Learning Objectives:
 

• At the end of this chapter, the students will be able to:

 
– discuss the history of money in the Philippines;

– develop understanding on how money is being used in the day-to-day life of an

individual, the businesses, and the whole economy of the country;

– determine the importance of money supply in the economy;

– discuss the functions and characteristics of money;

– familiarize some features in recognizing genuine Bangko Sentral ng Pilipinas

(BSP) notes.
MONEY AND ITS SIGNIFICANCE IN
THE ECONOMY
 Money….
• Money is absolutely necessary to the
development of commerce and trade
 Monetary Standards

• It serves as the domestic requirement of the

country that is, filling its internal needs.
• It serves as the requirement of international
trade. This earns dollars for the country and
thereby makes the economy stable.
 Money supply
• Money supply is the quantity of money units
available for use as a medium of exchange.
It includes:
• money in circulation;
• savings and demand deposits;
• money market funds;
• and short term repurchase agreement.
 VALUE OF MONEY

• It is the amount of goods and services which

will be given for a unit of money
• prices of commodities and services vary
inversely with the value of money, so, when
there is an increase in the price, the value of
money is decreased.
 FUNCTIONS OF MONEY

1. Money as a medium of exchange

2. Money as a measure of standard value
3. Money as a store of value
4. Money as a means of debt payment
 CHARACTERISTICS OF A GOOD
MONEY
1. General Acceptability
2. Portability
3. Cognizability
4. Durability
5. Divisibility
6. Malleability
7. Elasticity
8. Convertibility