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Money is any object accepted as means of exchange within a society

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To be considered as “Money” an item must have six key characteristics Durability Uniformity Portability Divisibility Acceptability Limited Supply

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Durability means that the item must be able to withstand being used repeatedly. Items that are considered Currency, coins and paper bills used as money meet this requirement. Portability means that individuals are able to carry money with them and transfer it easily to other individuals. -This is why coins and paper money have historically proved popular.

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- Divisibility means that the money can easily be divided into smaller units of value. - Today, different coins and notes convey these fractional values. Uniformity means that all versions of the same denomination of currency must have the purchasing power. As an example, a 1928 $2 bill will still buy $2 worth of goods or services today.

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Limited Supply means that restrictions on the amount of money in circulation ensure that values remain relatively constant for the currency. The responsibility for maintaining an adequate money supply falls on the Federal Reserve System. Acceptability means that everyone must be able to use the money for transactions. In the United States this is indicated on our paper bills by the notation: “This note is legal tender for all debts, public and private”.

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Functions of Money Medium of Exchange This function means that money is accepted throughout the economy as payment for goods and services. Buyers acquire goods by giving up money. Sellers receive money when parting with their goods. This is, without question, the most important function of money. This is the function that makes money MONEY.

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Functions of Money Unit of Account A unit of account is a standard numerical unit of measurement of the market value of goods, services, and other transactions. Money allows us to compare similar offers for goods and services to determine the best value.

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Functions of Money Store of Value This function means that money can be used to purchase the same quantity of goods and services, that provide the same consumption value, in the future as it can purchase today. Inflation is the primary nemesis for the ability of money to store value. However, the functional value of the stored money may change over time due to other factors.

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Classification of Money Commodity money Token money

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Commodity Money Its value comes from what made of it

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Commodity Money It is objects that have value in themselves as well as value in their use as money

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Commodity Money Gold Silver Copper Shells Candy

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Token Money  This kind of money is usually made of paper but equal to the face value of the money gold is kept in reserve.

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Token Money It doesn’t have real value in itself Its value comes from either the commodity it stands for or from a government regulation or law.

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Token Money Paper money Coins Banknotes Credit cards

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ORIGINS http://wall.alphacoders.com/big.php?i=247132 http://www.artslondonnews.com/wp-content/uploads/2013/11/money_03-1024x671.jpg http://www.superbwallpapers.com/photography/dollar-on-a-hook-24768/ http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=unit+of+account http://www.stopprintingmoney.com/Learning/What_is_Money/

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