• MONEY IS SOMETHING THAT IS GENERALLY ACCEPTABLE AS A MEDIUM OF EXCHANGE

• CASH CIRCULATING IN THE ECONOMY + DEPOSITS WITH FINANCIAL INSTITUTIONS MAKE UP THE MONEY SUPPLY

Money makes the world go around

Functions of Money

Medium of exchange

Measure of value

Store of value

Means of deferred payment

Characteristics of money

Acceptable

Durable

Portable

Divisible

Scarce

Why is money important for the economy to operate?

Research the history of money and the barter system

- What is barter?- What were the early forms of money?- When were coins first used?- When was paper money first used?- What are the advantages and disadvantages

of paper money?- Why were polymer notes developed?

Define the following terms

CashFinancial assetsLiquid assetsLiquidityMoney supplyPhysical assetsVelocity of circulationBank deposits Why couldn’t banks repay bank deposits if

everyone withdrew their money on the same day?