functions of money pdf

13 0 obj stream >> 12 0 obj Money is paid by the buyer who buys the Structure of Financial Markets Debt and Equity Markets Primary and Secondary Markets Exchanges and Over-the-Counter Markets Money and Capital Markets 3. x�5�K Money performs many primary and secondary functions. Commercial finance is made available to the traders through bills of â¦ %PDF-1.5 %�� âMoney is a matter of functions four - a medium, a measure, a standard, a store.â Thus, money is a medium of exchange, a measure of value, a store of value, and a standard of deferred payments. Financial Instruments Money Market Instruments Capital Market Instruments 4. 25 0 obj endobj Functions of Money In this story, the dollar that Matt found was used for many things. �z@� �0& 23 0 obj /Resources 20 0 R /Filter /FlateDecode /Length 67 >> Definition of Money: âAnything which is widely accepted in payment of goods or in the discharge of other kind of payment obligationsâ. ADVERTISEMENTS: The following points highlight the top six functions of money. <> endstream endobj endstream endobj /Resources 20 0 R /Filter /FlateDecode /Length 67 >> 19 0 obj That is people hold money for aiming future. You must be well familiar with all of them. stream 2. Everything that fulfills these three functions can be considered money. �z@� �0& /Length 672 >> Public �J{*օ�� 9�� t� 29 0 obj x�3R��2�35W(�*T0P�R0T(�Y@�� Money is the commodity or fiduciary instrument (credit or paper money) that carries purchasing power between trades and over time. endstream ��87�%��x Microsoft® Word 2010 You just clipped your first slide! � x�3R��2�35W(�*T0P�R0T(�Y@�� Students are then paired to share and revise their answers before being randomly chosen to report their answers to the larger group. Write this list on the chalkboard or on chart paper. /Resources 20 0 R /Filter /FlateDecode /Length 67 >> � x�3R��2�35W(�*T0P�R0T(�Y@�� be most importantly a function of the interest rate, income, and wealth in the economy. /Resources 18 0 R /Filter /FlateDecode /Length 111 >> � .� � � �\ |�$ � x�3R��2�35W(�*T0P�R0T(�Y@�� endobj 1] Money â¦ They heat the cabin and cook their food with wood; a nearby stream and well furnish water. <> Money performs many functions in a modern economy. Money serves as a standard for deferred payments. �\ |�" � I٫|F��9ռ�ba3�)��Su�O/��X��u�mV�l��J��wGRNN�D��~yI��\&��#��_f��^�D*�I�OzB`��xa�Ì��'�L�V��Ot1[Jj�4��~t��WΏ8�!$��A��+�nH�$��_-F�=p�?d��9�s�b>W�6t��` ��'E*�dH�sq�Ĕ5x�d�s. Wholesalers sell the same goods to the consumers in exchange of money. x�3R��2�35W(�*T0P�R0T(�Y@�� <> Money and its Functions. <> Find out all about the primary functions of money using this awesome quiz and worksheet. <> money it issues with a functionally equivalent and much more efficient digital sys-tem. /Resources 20 0 R /Filter /FlateDecode /Length 67 >> <> x�3R��2�35W(�*T0P�R0T(�Y@�� As stated above, money primarily functions as a medium of exchange. ��c�� ks� Function # 1. Function of Financial Markets and Financial Intermediaries 2. endstream � Gold, silver, cowrie shells, cigarettes, and â¦ stream Three functions of money are: 1. endobj 16 0 obj 10 0 obj .� <> Knowing the value or price of a good, in terms of money, enables both the supplier and the purchaser of the good to make decisions about how much of the good to supply and how much of the good to purchase. The task is to match functions with definitions. stream (Mankiw, 1999, pp.155-156) These three different functions can be distinguished in the following ways: 3.1. <> x�3R��2�35W(�*T0P�R0T(�Y@�� (i) Helpful in making decisions: x��Yێ�6}_`�A��M�� @�� E7M��S�E�z��Vj�ү�)ʢ,z�-�x%q8s8. v`$�0B�!L�&B!��~��6�s�B��l�,#!��Da"�0B�!,��"~��[��߫��Ǿ��ޘ�L/ !L�&B!��Da"��ї2�Z9��~��65=�T�#��hG��0B�!L�&B!��S'��}v5V|�Ԓ��Q\��Ha"�0B�!L�&B�jk�}�gu��Z�"t덹�d��#!��Da"�0B�!�(�(Z�@��Ϧ4�RS�&i�8Yt�2B�!L�&B!��F��g��}سo��_S�z=W�|��Da"�0B�!L�6�E�Z�y��!��(��Da"�0B�!l�)��;�=Wu顭#Zq��Ì�&B!��Da"�0B��+��sM� U��z��R�nƼ2�FB!��Da"�0BX`�bLcnO�s�U�F�I-�i)�>B�!L�&B!��8Ʌ��`hti��}�z^//�Ha"�0B�!L�&BLQ��I��WQ�?VO�U��'B!��Da"��Q�(��s�b�k�}�Nr��VK�c$�0B�!L�&B!��8� ��y=�qԟ@��K|یFB!��Da"�0B�)�ŷ\z�J��+�w}��m3�(��Da"�0B�!L�6�j��Ha"�0B�!L�&BLQč�&��J��q� ��>�/�.#!��Da"�0B�!��.#!��Da"�0B�!L�&B!��Da"�0B�!L�y��? These functions help us transit in goods and services with ease. It is a medium of exchange, a unit of account and a store of value. endstream endobj � In a think-pair-share activity, students first work independently determining how a list of items fulfill all or some of the functions of money in the US economy. Commodity versus Fiat Money Money has taken a wide variety of forms in different cultures. endobj stream � endobj Name some ways the dollar was used. stream (�D�Vy�_\\|��u�ٔ�777/nP>y~~~yy��v��ޖ#\]]�"�>"l��+�|��+5��뾌Eﮫ.��>�YE�}D��g�߾}+��E?~�hpv�=��$®ʨ��.e�,��ot��4}9}3\~]>.��D�U��n_��}ؤR��q�F��"�r��g��'z��+I��߿��Y��ׯ_��ߖ;��Z/}P1vRF�2��lʨUy�2v��3�Ǉg�'�_L��7��Ϸ��*�/=�7�V�� !>� � Microsoft® Word 2010 ̹�5b��Sh��ete��l0F��I�0`{�n��鏆��h�cW�Z��q|��n��P��Ty�P!d�%"��"��.��^$�q7T1B-��"�Ϟ;�!�x":;y��M��oh��׬��kdT��Gk~ړ�?�B�G�ڊ��#`_z ��t+l��p7$��=�j06ds�.P��G@t>��]8��[w��u��ڐ�#�2��ݛz�?��[7,��;|��0za��F��ɀ�kx�t�4Zȡ��I�R��n��pwM7�}��a:�e�Ɋ*�Q��BX��(�4��*�%��X�q�[t`��u��#5N�/ �V�� X�]z2��S�}J��Z�)/[S��覤�Z�جysC�fKE�h��e�P�e�un62�-��0�|uSz1��պ��b��ǣ �U�~��7k�L�K�1��x[�ߖ^�:�6 ��5P�SU-�$Dcj�֤m�. � /Resources 30 0 R /Filter /FlateDecode /Length 2082 >> � endobj 3. ��ebbbbbN��C`Y�X�X�X�X�X��!��@�@�@�@�@�@��XV V V V V V�t,++++++p:��8� x�3R��2�35W(�*T0P�R0T(�Y@�� ,++++++p:��8� �z@� �0&�2�Գ��ɹ endstream � stream You see, a measuring unit like kilometer is used in measuring distance in order that we can compare the distance from one place to another. x�3R��2�35W(�*T0P�R0T(�Y@�� 2019-02-21T10:28-05:00 endstream endobj ��M�o�� Da"�0B�!L�6�E��j�MZi�ϫ�5b�>)B�!L�&B!��(�m��mG�}�j�=Wq�(��Da"�0B�!��^a� ��`�� &B!��Da"��Q.��Я�6��V�o��81B�!L�&B!��F_E�b��F��-��O�4ZE�sߎ�6�0B�!L�&B!��Da�osD��j4%X�X�&��?W��m�D.5gn$�0B�!L�&B!��2�_0��}�F'��{�ןU��f ��Ha"�0B�!L�&B�jkcnro��Y?��mqI��a$�0B�!L�&B!�兞�+�7z\|?�_�F�8=ֻ��&B!��Da"��Q�(�d�}V|�Fo�� x��ڱ � A��{��4S��\��I� It is a standard for measuring values. endstream stream The most important functions are given in the form of a couplet quoted below. This means that people can buy or sell goods and services with the help of money. (da?ŀ)eO�PI�qt��tN��Z��?�˴|��'�v�S�'A�H�M�l��L��>z�?��[�@��X3M�G%;փ�r�c�D�ZθH�ΎÒRzQg�bJ/��{7�7�7n< � ��C2� stream Thus, it allows people to save in order to make purchases at a later date. <> �z@� �0&�2�Գ��ɹ function of money exhibited here? 4. It shows how money facilitates transactions by comparing a money system to a barter system. 1 0 obj <>/Metadata 336 0 R/Pages 2 0 R/StructTreeRoot 61 0 R/Type/Catalog>> endobj 336 0 obj <>stream stream endobj x�3R��2�35W(�*T0P�R0T(�Y@�� Store of Value: It can be saved. Secondary functions of money include two functions like money as a store of value and as a standard of differed payments. They are given below. �!> � Functions of Money. Other Functions: Money also performs such functions which affect the decisions of consumers and governments. <> Now, suppose the family decides that the children need a new set of clothes. stream Rewards of factors of production in the form of wages, rent, interest and profit are determined and paid in terms of money. Functions of Money The earliest forms of money arose spontaneously in barter economies when experienced traders identified certain commodities that were so widely desired for actual use in the society that they could reasonably count on their acceptability as payment in almost any trade. The functions of money can be known from its definition. 4 0 obj Money also functions as a suitable unit of account. Functions of Money. stream Let us take a look at the three main functions of money. So money serves all of these functionsâ it is a medium of exchange, store of value, unit of account, and standard of deferred payment. Lynda McAndress ��S�VXG�P��=��E functionsss INTRODUCTION TO MONEY: ORIGIN, HISTORY AND FUNCTIONS Key Concepts Barter, the purpose of money, early and current forms of money Summary This lesson introduces students to types of money (cash, coin) and the purposes of money. � B. � Medium of Exchange The primary function of money is that it acts as a medium of exchange. /Resources 20 0 R /Filter /FlateDecode /Length 67 >> endstream On the payment of money, purchase of goods and services can be made i.e. �!>F <> � �\ } ' <> What is the primary function of money exhibited here? ��c�� kl� �ۆ>W��e�Ao c��pp�^ ��kǚ�٤�֦W�w��7W�� Qu ��ӊ��)kͽ�ZӰ��`&ƹ�KH��j�g�4bNt�h�|a�>�]W��+�0 >�� <> endstream Hope you'll find it useful. endstream �\ |�% .� goods and services are exchanged for money. 18 0 obj � 1 0 obj <> ��^�27��%+��x�c;�>`�H�uҟ��i,�,�p��W�L�yr��v��qoу�J�_�7�|wZ��G��9{Vy�E?.� + ۚF�2L��8ȑonn�G��)=ȑ�L�mM��:ȑ��s�#ә�( �Ha"�0B�!�/k�� 0D�=Ŝ 6��v+~P\(�� -&o��1(M��V40n�.�$��k� �p9��iԨO̪��ZFn�qE� � This function of money is universal: money appears in some form wherever there is active trade, in every advanced economy and many primitive economies. .� stream � 4. Last year, you sold your game system to your friend Jimmy for $125 in cash. 3. Another function of money is that it is used as a measuring tool for goods and services. x�3R��2�35W(�*T0P�R0T(�Y@�� endobj �\ |�# Products are exchanged for money that money can be then used to buy other product. They will be Money also helps in the distribution of national income. ��ebbbbbN��C`Y�X�X�X�X�X��!��@�@�@�@�@��XV V V V V V�t,+++++++pg��8� 11 0 obj ��c�� kz� In the case of holding money, the "price" is the opportunity cost of holding one dollar for one year, the interest rate. .� /SMask 29 0 R /Length 2105 >> endstream Store of value: This function refers to the transferring of present purchasing power to coming days or months. 27 0 obj �z@� �0&�2�Գ��ɹ � Functions Of Money: Medium of Exchange: Goods and services can be traded with money. However, it also has developed secondary functions that derive from its use as a â¦ <> /Resources 20 0 R /Filter /FlateDecode /Length 67 >> <> endobj stream �z@� �0& �\ |�& can of diced tomatoes for $2.55. Overview & Lesson Objectives ��ebbbbbN��C`Y�X�X�X�X�X��!��@�@�@�@�@��XV V V V V V V�� âMoney can be defined as anything that is generally acceptable as a medium of exchange and at the â¦ �z@� �0& � At the grocery store last week, you had to decide whether to buy the 14.5 oz. If the cost prices of all goods go up in monetary terms, i.e., there is a general rise in the cost price degree, the value of money in terms of any good must have come down â in the sense that a unit of money can now buy less of any good. �!>& � � �z@� �0& <> �$��I�~�! �z@� �0& money does. If there were no money, goods would have to be exchanged through the process of barter (goods would be traded for other goods in transactions arranged on the basis of mutual need). <> Functions of Money. 17 0 obj � 6 0 obj �z@� �0& This worksheet is about the functions of money. <> This function of money facilitates trade and helps in conducting transactions in an economy. � They grow or raise most of their food, and live in a cabin they built. For, âHow does money separate the â¦ endobj stream Functions of Money - Free download as Powerpoint Presentation (.ppt), PDF File (.pdf), Text File (.txt) or view presentation slides online. Now customize the name of a clipboard to store your clips. endstream Functions of Money: In general terms, the main function of money in an economic system is âto facilitate the exchange of goods and services and help in carrying out trade smoothly.â Its basic characteristic is general acceptability. However, as a system of exchange the barter system would be highly impracticable today. ��c�� ke� � Discuss todayâs economic concepts: functions of money, characteristics of money, currency, and circulation of money. x�3R��2�35W(�*T0P�R0T(�Y@�� 14 0 obj endobj � To begin, let's think about a frontier household. Money is a set of assets that are generally used and accepted as a medium of exchange for goods and services in an economy. � endobj Clipping is a handy way to collect important slides you want to go back to later. endobj Money serves three basic functions: Medium of exchange: because you can use it to buy the goods and services you want, everyoneâs willing to trade things for money. For example, if the baker who supplied the green-grocer [â¦] 3. ��c�� k�� endstream �z@� �0&�2�Գ��ɹ � � 28 0 obj Money also functions as a unit of account, providing a common measure of the value of goods and services being exchanged. Producers sell their goods to the wholesalers in exchange of money. � Money performs five important functions :-Medium of exchange: Money acts as a medium of exchange as it's generally accepted. 9 0 obj Money is received by the seller who sells the good. 22 0 obj x��aV; �a{7��DX��q%�p%�J0�9��2L�/-��N��@c&��/@��N�&B!��Da"�0B�!L�&B!��Da"�0B�!L�&B!��Da"�0B�!L�&B!��Da��[�m6�v��?�gVgOu�Y��kV�W��Da"�0B�!L��O`�}��/�b6e�1�X�(��Da"�0B�!l�)��o��v�-��x��g�sޢŗ �j9,#!��Da"�0B�!L�f��#'��Ik��_-�e$�0B�!L�&B!�� t[ /XObject <> ��c�� k�� Measure of value: it simplifies the exchange process because itâs a means of indicating how much something costs. 1. Money as a store of value Does not deteriorate and stores value 16. endobj This worksheet is good for upper-intermediate or advanced students. � endobj 3. 8 0 obj � can of diced tomatoes for $1.75 or the 28 oz. �_��YV V V V V V�t,++++++p:�� The demand for any good or service is usually pictured in economics as a function of its price, holding income and other factors constant. � � <> 3 0 obj of money to reduce these costs. Importance of a developed money market and its various functions are discussed below: 1. Financing Trade: Money Market plays crucial role in financing both internal as well as international trade. <> A Medium of Exchange: The only alternative to using money is to go back to the barter system. .� | 5 0 obj � It is used as a store of value. Students are given the descriptions of three major functions of money (Medium of exchange, Store of value, Unit of account). Money has no power to satisfy human wants, but it commands power to purchase those things, which have utility to satisfy human wants. At the other end of the spectrum, many central banks and governments have taken predominantly conservative stances, which accounts in part for the very limited success of recent efforts to diffuse digital money more widely. � Money is basically any commodity that is generally accepted in the exchange of goods and services, and when any of the above types of inflation occurs, money begins to lose some of its functions, and I shall be discussing how this happens in my following essay. endobj Money as a Medium of Exchange 7 0 obj <> 2019-02-21T10:28-05:00 �!>� endobj The following are the utmost important functions of money. SECONDARY FUNCTIONS OF MONEY Money has the potential to influence an economy, by influencing interest rates, price levels, resources, etc. Apart from its function as a medium of exchange, money also serves as a store of value and a unit of account. endobj � 1. stream The value of all commodities and services can be expressed in monetary terms. <> It transfers value. No matter whether money is gold or paper or beads or knives, in any economy it has three functions. <> <> 21 0 obj <> Medium of exchange: Money can be used for buying and selling goods and services. endstream It serves as a medium of exchange. Money as a standard of deferred payments Money is useful in the purchasing goods on credit as it is easy to borrow-and lend 4. endobj Our entire economy and society depend on money to function smoothly. endstream endobj 2 0 obj <> endobj 61 0 obj <> endobj 63 0 obj <> endobj 62 0 obj <> endobj 66 0 obj [65 0 R 68 0 R 69 0 R 70 0 R 71 0 R 72 0 R 73 0 R 78 0 R 79 0 R 80 0 R 81 0 R 82 0 R 85 0 R 87 0 R 89 0 R 92 0 R 94 0 R 96 0 R 97 0 R 98 0 R 99 0 R 100 0 R 101 0 R 102 0 R 105 0 R 107 0 R 109 0 R 111 0 R 112 0 R 113 0 R] endobj 75 0 obj [292 0 R 293 0 R 294 0 R 295 0 R 296 0 R 297 0 R 298 0 R 299 0 R 300 0 R 301 0 R 74 0 R] endobj 77 0 obj [302 0 R 303 0 R 304 0 R 305 0 R 306 0 R 307 0 R 308 0 R 309 0 R 310 0 R 311 0 R 76 0 R] endobj 115 0 obj [114 0 R 116 0 R 117 0 R 118 0 R 119 0 R 120 0 R 121 0 R 122 0 R 123 0 R 124 0 R 125 0 R 126 0 R 127 0 R 130 0 R 132 0 R 134 0 R 136 0 R 138 0 R 140 0 R 141 0 R 142 0 R 143 0 R 144 0 R 145 0 R 146 0 R 147 0 R 148 0 R 149 0 R 150 0 R 151 0 R] endobj 153 0 obj [152 0 R 154 0 R 155 0 R 156 0 R 157 0 R 160 0 R 162 0 R 164 0 R 165 0 R 166 0 R 167 0 R 168 0 R 169 0 R 170 0 R 171 0 R 172 0 R 173 0 R 174 0 R 175 0 R 176 0 R 177 0 R 178 0 R 179 0 R 180 0 R 181 0 R 182 0 R 183 0 R 184 0 R 185 0 R 186 0 R 187 0 R 188 0 R 189 0 R 190 0 R 191 0 R 192 0 R 193 0 R 194 0 R 195 0 R] endobj 197 0 obj [196 0 R 198 0 R 199 0 R 200 0 R 201 0 R 202 0 R 205 0 R 207 0 R 209 0 R 211 0 R 213 0 R 215 0 R 217 0 R 218 0 R 219 0 R 220 0 R 221 0 R 222 0 R 223 0 R 224 0 R 225 0 R 228 0 R 230 0 R 232 0 R 234 0 R 236 0 R 238 0 R 239 0 R 240 0 R 241 0 R 242 0 R 243 0 R] endobj 245 0 obj [244 0 R 246 0 R 247 0 R 250 0 R 252 0 R 254 0 R 256 0 R 258 0 R 259 0 R 260 0 R 261 0 R 262 0 R 263 0 R 264 0 R 265 0 R 266 0 R 267 0 R 268 0 R 269 0 R 270 0 R 271 0 R 272 0 R 273 0 R 274 0 R 275 0 R 276 0 R 277 0 R 278 0 R 279 0 R 280 0 R 281 0 R 282 0 R 283 0 R 284 0 R 285 0 R 286 0 R 287 0 R 288 0 R 289 0 R 290 0 R 291 0 R] endobj 244 0 obj <> endobj 246 0 obj <> endobj 247 0 obj <> endobj 250 0 obj <> endobj 252 0 obj <> endobj 254 0 obj <> endobj 256 0 obj <> endobj 258 0 obj <> endobj 259 0 obj <> endobj 260 0 obj <> endobj 261 0 obj <> endobj 262 0 obj <> endobj 263 0 obj <> endobj 264 0 obj <> endobj 265 0 obj <> endobj 266 0 obj <> endobj 267 0 obj <> endobj 268 0 obj <> endobj 269 0 obj <> endobj 270 0 obj <> endobj 271 0 obj <> endobj 272 0 obj <> endobj 273 0 obj <> endobj 274 0 obj <> endobj 275 0 obj <> endobj 276 0 obj <> endobj 277 0 obj <> endobj 278 0 obj <> endobj 279 0 obj <> endobj 280 0 obj <> endobj 281 0 obj <> endobj 282 0 obj <> endobj 283 0 obj <> endobj 284 0 obj <> endobj 285 0 obj <> endobj 286 0 obj <> endobj 287 0 obj <> endobj 288 0 obj <> endobj 289 0 obj <> endobj 290 0 obj <> endobj 291 0 obj <> endobj 64 0 obj <> endobj 49 0 obj <>/MediaBox[0 0 612 792]/Parent 2 0 R/Resources<>/Font<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI]/XObject<>>>/StructParents 6/Tabs/S/Type/Page>> endobj 50 0 obj <>stream %PDF-1.4 Right from the beginning, money has been performing an important function as medium of exchange in the society. endobj 15 0 obj � endstream Money facilitates transactions of goods and service as a medium of exchange. �z@� �0&�2�Գ��ɹ stream � ��ebbbbbN��C`Y�X�X�X�X�X�X�;+��@�@�@�@�@��XV V V V V V�t,+++++++++++++++++++��\��kMbY��ךĲ��:��Pb��