Money and Commerce Basics
This medium of exchange solves many problems in trade by acting as a common value for goods and services.
What is Money?
This factor means natural things like land, water, and minerals.
What is land
Making things just for yourself and your family to use.
What is direct production?
Swapping one thing for another without using money.
What is bartering?
This introductory concept to commerce involves the buying and selling of goods and services to satisfy human wants.
What is Trade
This is the work people do with their hands or brains.
What is labour
Making things to sell to other people.
What is indirect production?
Money was created to fix the problems of this old way of trading.
True or False
True
These supportive services, like banking and insurance, aid the smooth flow of trade without directly producing goods.
What are aids to trade?
These are tools, machines, and factories made by people to help make things.
What is Capital
What is indirect production?
Indirect production lets people specialize (do one job very well) and then trade.
Using money or credit cards are examples of these better ways to trade.
What are trade solutions?
In the role of money, this function allows it to serve as a store of value, enabling savings for future use.
What is deferred payment /unit of account?
This person starts a business and takes the risk to make profit.
What is an entrepreneur.
What are direct and indirect production?
Direct production = make for yourself. Indirect production = make for selling.
Name at least 1 downside of Bartering
Unfair trades...etc
Money fixes the big problem in bartering where two people must want exactly what the other has.
What is double coincidence of wants?
The four factors together are land, labor, capital, and this fourth one.
What is entrepreneur(ship)?
Because of Direct production, we have extra goods to sell and can do bigger business.
True or False
False
What are Trade solutions
Money is a Trade solution