History of Money
What is the oldest form of money?
Barter System
What is the main effect of inflation?
Reduced purchasing power
What is an example of Fiat Money?
Modern paper bills and coins, like the U.S. dollar, are fiat currencies
How are our financial decisions influenced by money?
What we buy, how we live, and what we prioritize
What is an example of a digital payment system?
PayPal, Venmo, CashApp, Apple Pay
What are the two main examples of precious metals used for money?
Gold and Silver
What is intrinsic value?
The inherent worth independent of monetary value
No
Provide an example of investing your money?
Stock Market, 401K, IRA, Real Estate, etc.
What is a limitation of a barter economy?
Double coincidence of wants (both parties must want what the other has).
Lack of standard measurement for value.
What did the US use to have their money backed by before President Nixon removed it?
Gold, Gold Standard
What is inflation?
When the value of money decreases, leading to higher prices.
What is Fiat Money?
Money that has value because the government declares it to be legal tender, not because it has intrinsic value.
What are the 4 ways money can be USED?
Invest, Save, Share, and Spend
What are 2 advantages of Digital Money?
Faster, secure transactions across borders
Reduced reliance on physical cash
Provide at least 2 examples of commodity money used in early history?
Cattle, Grain, and Shells
What is the primary role of the Federal Reserve system?
Managing the nation's money supply and control inflation
Why does Fiat Money work?
Trust in the government and economy backs the value of the money.
Provide an example of a personal finance opportunity cost
Choosing to spend $50 a week on Starbucks instead of saving that money for something better like a Car
What characterizes cryptocurrencies?
Blockchain technology
Which country created paper money between 618 and 907 AD?
China, the Tang Dynasty
How does the Government reduce inflation?
Adjusting interest rates and money supply
Before the US Dollar was Fiat Money, what was our money backed by/why did it have value?
Gold Standard
What is an opportunity cost?
The value of what you give up when you make a decision
What are the 4 FUNCTIONS of money? (not ways used)
Medium of Exchange
Store of Value
Unit of Account
Standard of Deferred Payment