Scribd Logo
Upload

Welcome to Scribd!

  • Barter System

    Uploaded by

    Allauddinagha
    50 views2 pages
    Money serves three main functions: as a medium of exchange to facilitate the trade of goods and services, as a unit of account to assign value to economic transactions, and as a store of value to preserve wealth over time. Money is generally defined as anything that is widely accepted as payment, such as paper bills, coins, checks, and deposits in checking accounts. While wealth encompasses total assets, money refers specifically to the medium of exchange and unit of account in an economy. The introduction of money decreases transaction costs and increases efficiency by resolving the problem of double coincidence of wants in barter systems.

    Original Description:

    Original Title

    Barter system.docx

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Money serves three main functions: as a medium of exchange to facilitate the trade of goods and services, as a unit of account to assign value to economic transactions, and as a store of value to preserve wealth over time. Money is generally defined as anything that is widely accepted as payment, such as paper bills, coins, checks, and deposits in checking accounts. While wealth encompasses total assets, money refers specifically to the medium of exchange and unit of account in an economy. The introduction of money decreases transaction costs and increases efficiency by resolving the problem of double coincidence of wants in barter systems.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    50 views2 pages

    Barter System

    Uploaded by

    Allauddinagha
    Money serves three main functions: as a medium of exchange to facilitate the trade of goods and services, as a unit of account to assign value to economic transactions, and as a store of value to preserve wealth over time. Money is generally defined as anything that is widely accepted as payment, such as paper bills, coins, checks, and deposits in checking accounts. While wealth encompasses total assets, money refers specifically to the medium of exchange and unit of account in an economy. The introduction of money decreases transaction costs and increases efficiency by resolving the problem of double coincidence of wants in barter systems.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 2

    Barter system: Exchange of goods and services directly

    Meaning of money: (for an economist) any thing that is generally


    accept in the payment of goods and services or in the repayment of
    debts. (Currency) paper bills + coins , this is money. It clearly fits the
    definition of money.
    A broader definition: checks and checking account deposits
    Saving deposits: currency and checking account deposits ( can also
    function as money)
    Money & Wealth: Mix them which make things complicated
    Total collection of pieces of property that serve as a store of value
    (Money & Income)
    Money: is a stock (point of time)
    Income: is a flow (earning per unit of time)
    Concept of money in our course: accept in the payment of goods and
    services or in the repayment of debts
    Functions of Money: 3 basic functions of money
    1. Medium of exchange
    2. Unit of account
    3. store of value
    1. Medium of Exchange: economic efficiency.
    Double coincidence of wants:
    Transaction cost
    So the incorporation of money in the economy we can decrease
    transaction cost + increase efficiency+ promote specialization

    You might also like