History of Money
When currency did not exist, what did people use to trade?
Goods and Services
The Banks started by the Roman Empire.
True or False?
True!
Issuing money eliminates the inconvenience of what system?
The Barter System
Who were the first to use iterations of coins, the Chinese or the Greeks?
The Greeks (650 B.C)
In what century did Banks become respectable organizations?
The 19th Century
State any 3 of the 6 characteristics of our money system that allows it to work well.
Portable
Divisible
Durable
Uniformity
Accepted by people everywhere
Limited supply
What allowed international trade to occur?
Paper money
Define Money Supply.
Money supply is the amount of money that is in circulation at a given time. It can be measured in terms of currency or deposits, but it's important to note that not all money is created equal.
According to the needs and availability of means, the kinds of money has changed.
True or False?
True
Define what is a Currency War
The creation of paper money would eventually lead to currency wars, which occur when leaders of different nations attempt to devalue their own currency. In turn, this increases demand and helps stimulate their economy. While this still occurs in today’s foreign exchange market, the signature of a currency war is the fact that several nations are involved in the devaluing of other nations’ currencies.
How does the increase in money supply affect prices?
This increase in the money supply leads to an increase in prices because it means that there is more money available for transactions than there was previously.
What are the 4 main types of Money?
Commodity Money
Fiat Money
Fiduciary Money
Commercial Bank Money