RSM100Y1 Chapter 1: chapter1
Document Summary
Money: a portable, divisible, durable and stable object generally accepted by people as payment for goods and services. Portability: currency is lightweight and easy to handle. Divisibility: currency is easily divisible into smaller parts with fixed values for each unit, eg: dollars can be changed to 10 dimes, 20nckels, and 100 pennies. It is easy to match units of money with the value of all goods. Durability: currency does not spoil, it does not die, and if it wears out, it can be replaced with new coins or paper money. Stability: while the value of the paper money we use today has fluctuated over the years, it is more stable than others. Barter economy: one in which goods is exchanged directly for one another. The barter economy is inefficient compared to money economy. Medium of exchange: we use money as a way of buying and selling things.
