MONEY - Hamburg Middle School
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Transcript MONEY - Hamburg Middle School
Anything that people will accept as
payment for goods & services
Commodity Money
Derives its value from the type
of material from which it is composed
Best example in history are coins
made from precious metals
Problem w/commodity money
people hoard it if it becomes too
valuable
Paper money backed by something
hard (gold/silver)
Nothing hard backing it, but declared by the
gov’t & accepted by citizens to have worth
Started in 1971
Gov’t must control its supply or maintain its
scarcity for the dollar to be worth more
Why is U.S. money considered “fiat money?”
It’s only money because our gov’t says it is.
Medium of exchange
Measure of value
Store of value
Portable
Money needs to be small, light & easy
to carry
Paper $ is easy to carry
If broken down, it can’t lose its value
Change can be made
Sturdy enough to last throughout many
transactions
Having features and markings that
make it recognizable
Stability of value
You must control inflation
Money must be scarce to have any
value
Everyone must agree to its value
What two types of money did American
citizens reject?
1. Susan B. Anthony dollar
2. 2 – dollar bill
Currency – coins and paper
Checking account/demand deposits
Near money – including savings
accounts
You cannot be forced to accept a personal
check for payment of a debt.
Over 80% of all spending is done through
checks.
Even if you use credit cards, you usually pay
them off with a check.
You have a record of the transaction
If you lose a check, you can stop payment
If you lose a credit card, you can cancel the
card
If you lose cash, YOU LOSE!
Over the last 10 years, society has relied
more on credit & debit cards
Credit debt has gone up