FreeEconHelp.com, Learning Economics... Solved!: money
Showing posts with label money. Show all posts
Showing posts with label money. Show all posts

3/8/12

What are the properties of money?

06:48
What are the properties of money?
The major desirable properties that money should have include:

(1) a numeraire:  This means that goods and services can be valued easily in one term of measurement, such as dollars.  This is instead of valuing 1 t shirt as 3 fish, or 4 shoes, we can value it as $10.

(2) a means of exchange: This means that we can use money to exchange for goods and services instead of barter.

3/6/12

Commodity money vs. Fiat money, what's the difference?

07:54
Commodity money vs. Fiat money, what's the difference?
This quick post goes over a question recently asked about the difference between commodity and fiat money.

Basically:

Commodity money has another value or use, such as gold/jewelry/shells or possibly metal coins.

Fiat money is worthless without a guarantee from a government (notice on US currency it says people MUST accept this for all debts).