TOPIC I:

THE ROLE AND

USES OF MONEY
(Monetary Policy and Central Banking)
Learning ▪ Identify the objectives, nature,
Objectives roles and uses of Money.
▪ Identify the characteristic of good
money.
▪ Explain the progression of money
from Bartering to Virtual Currency

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 Is any object that is
generally accepted as
MONE payment for goods
and services and
Y repayment of debts in
a given country or
socio-economic
context
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HISTORY

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HISTORY

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HISTORY

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HISTORY

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HISTORY

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HISTORY

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 1. General Acceptability
2. Portability
3. Uniformity
CHARACTERISTICS
4. Malleability
OF A GOOD MONEY 5. Durability
6. Divisibility
7. Cognizability
8. Stability

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FUNCTIONS
OF MONEY
MEDIUM OF EXCHANGE

Money is used to intermediate the

exchange of goods and services.

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FUNCTIONS
OF MONEY
UNIT OF ACCOUNT

A standard numerical unit of measure of

market value of goods, services and
other transactions.

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FUNCTIONS
OF MONEY
STORE OF VALUE

Money should be reliably saved, stored

and retrieve and usable when retrieved.
The value must be stable over time.

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FUNCTIONS
OF MONEY
STANDRAD OF DEFERRED
PAYMENT

MEASURE OF VALUE

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TYPES OF
MONEY
COMMODITY MONEY
Is a good whose value serves as the
value of money
- - Full-bodied Money
- - Representative Full-bodied Money

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TYPES OF
MONEY
FIAT MONEY
Is a government–issued currency that is
not backed by a physical commodity,
such as gold or silver, but rather by the
government that issued it.

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TYPES OF
MONEY
FIDUCIARY MONEY

Depends for its value on the confidence

that it will be generally accepted as a
medium of exchange.

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TYPES OF
MONEY
COMMERCIAL BANK
MONEY
It represents the portion of a currency
that is made of debt generated by
commercial banks.
- Fractional Reserve Banking
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Money vs Currency Money Currency

Money which cannot be touched, neither

Currency is the promissory note or coin which is
Basic Definition it can be smelled; however, money can
presented in the form of money.
be seen in terms of the numbers.

Concept Type Money is an intangible concept Currency is a tangible concept

Currency takes the form of hard plastic or coins or

Basis Form Money takes forms of numbers
says the currency notes.
Money is backed by many different
things for example if one possesses
Whereas Fiat money which is currency will be backed
Support  money in a bank account then check
by the government of that country.
(kind of money) would be backed by the
same.
Online mode, check savings bank
Examples Coins, Hard currency notes, etc.
account, etc.
Money can be transferred through online Currency must be transferred via physical i.e. hand to
Transfer Mode 
mode hand transfer.

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GOLD STANDARD FIAT CURRENCY/
MONEY MONEY

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GOLD STANDARD FIAT CURRENCY/
MONEY MONEY

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GOLD STANDARD FIAT CURRENCY/
MONEY MONEY

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OZ is ounce.

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THANK
YOU!

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