MONEY - Hamburg Middle School

 Anything that people will accept as
payment for goods & services
Commodity Money
 Derives its value from the type
of material from which it is composed
 Best example in history are coins
made from precious metals
 Problem w/commodity money 
people hoard it if it becomes too
 Paper money backed by something
hard (gold/silver)
 Nothing hard backing it, but declared by the
gov’t & accepted by citizens to have worth
 Started in 1971
 Gov’t must control its supply or maintain its
scarcity for the dollar to be worth more
Why is U.S. money considered “fiat money?”
 It’s only money because our gov’t says it is.
 Medium of exchange
 Measure of value
 Store of value
 Money needs to be small, light & easy
to carry
 Paper $ is easy to carry
 If broken down, it can’t lose its value
 Change can be made
 Sturdy enough to last throughout many
 Having features and markings that
make it recognizable
Stability of value
 You must control inflation
 Money must be scarce to have any
 Everyone must agree to its value
What two types of money did American
citizens reject?
1. Susan B. Anthony dollar
2. 2 – dollar bill
 Currency – coins and paper
 Checking account/demand deposits
 Near money – including savings
 You cannot be forced to accept a personal
check for payment of a debt.
 Over 80% of all spending is done through
 Even if you use credit cards, you usually pay
them off with a check.
 You have a record of the transaction
 If you lose a check, you can stop payment
 If you lose a credit card, you can cancel the
 If you lose cash, YOU LOSE!
 Over the last 10 years, society has relied
more on credit & debit cards
 Credit debt has gone up

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