AP Macroeconomics Unit 4 Part 1
There are three different types of money; Commodity, Representative, and Fiat. Commodity money is goods that also function as money, an example is, tribes in Africa using cows as a form of payment. Representative money means that the currency is represented by a quantity of a precious metal. Fiat money is a promise by the government that the currency has value.
There are also three function of money; a medium of exchange, store of value, and unit of account. Medium of exchange is buying or selling goods and services. Store of value means that when someone puts money in the bank, it should retain its value. Unit of account means that the price of a product determines its value.
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ReplyDeleteSomething I'd like to add about money is that there are Six Characteristics to Money.
1. Durability, how long it can last
2. Portability, can be taken anywhere
3. Divisibility, can be broken down
4. Uniformity, it all looks the same
5. Limited Supply
6. Acceptability
other than that, nice blog :')