PBON02B Lesson 1 PDF

PBON02B Lesson 1 Stages in Exchange Development 1. Direct Appropriation Stage - what early man's needs was provided by its natural resources. 2. Barter/Direct Stage - goods and services directly exchange for other goods and services. - barter ended man's self-sufficiency and ushered in...

PBON02B Lesson 1 Stages in Exchange Development 1. Direct Appropriation Stage - what early man's needs was provided by its natural resources. 2. Barter/Direct Stage - goods and services directly exchange for other goods and services. - barter ended man's self-sufficiency and ushered in economic interdependence among men. 3. Use of Commodity as Money - some goods because of its usefulness, beauty, scarcity, and rarity commands a wide acceptance as a medium of exchange. 4. Credit Money - Money whose monetary value is more than its material or commodity value. Difficulties of Barter 1. Products do not have the same value 2. No double coincidence of wants 3. Lack of store value 4. It is cumbersome, inconvenient and indivisible. Types of Money - Non-Metallic (rice, corn, wheat, salt, tea, cattle). - Metallic Money (gold, silver, copper). - Intrinsic value or material value is equal to its monetary value. Money - Came from the Latin word "Moneta." - Any item or medium of exchange that symbolizes perceived value. - Anything which is used as a medium of exchange and is widely accepted for the payment of goods and services, debts and obligations within a given territory without reference to the credit standing of the person who offers it. Purchasing Power - Buying power to how much you can buy with your money. - As prices rise, your money can buy less. As prices drop, your money can buy more. Q: What gives money its purchasing power? A: Legal Tender Legal Tender Money - any form of money which according to law I acceptable for all forms of obligations. - Notes and coins issued by BSP are considered legal tender money in the Philippines. Security Features of Philippine Banknote +-----------------------+-----------------------+-----------------------+ | Look | Feel | Tilt | | | | | | Sampaguita Clear | Polymer Substrate | Enhanced Value Panel | | Window | | | | | Sampaguita Clear | Metallic Features | | Serial Numbers | Window | | | | | Blue Iridescent | | Shadow Thread | Tactile Dots | Figure | | | | | | Vertical Clear Window | Embossed Prints | | | | | | | Metallic Features | Flying Eagle | | | | | | | Blue Iridescent | | | | Figure | | | +-----------------------+-----------------------+-----------------------+ A close-up of a currency Description automatically generated A close-up of a currency Description automatically generatedA close-up of a paper money Description automatically generated Functions of Money 1. As a medium of exchange - Money serves as a common medium or tool of exchange. 2. As a standard unit of value - Money serves as a measuring device in which value of goods and services can be expressed. 3. As a store of value - Money has the quality to be kept or stored for future use. 4. As a standard of deferred payment - The money that we use as a medium of exchange is the same money we can use to pay for our debts and obligations 1. Commodity Money - Money that is *made up of precious metal* or another valuable commodity: - Non-Metallic Money - Metallic Money (Gold/Silver) 2. Currency (Bills and Coins) - *Domestic currency* can only be used in its country of origin. If it is used in another country, it needs to be exchanged with the currency of that country. 3. Check - Generally used by businesses and people in conducting business, as well as personal transactions - It is a *written order to a bank* (drawee), by the person who issues the check (maker or drawer) to pay someone whose name is written on the face of the check (payee) a certain amount of money on demand. 1. Asset Storage: Commercial banks provide *safe storage* and records of withdrawals, deposits, and direct payments they have authorized. 2. Providing Loans: They channel funds from depositors with surplus cash to individuals who are looking to borrow money. 3. Investments: Savers can make larger investments by pooling funds together by gaining access to a broader pool of investors. 4. Spreading Risk: Commercial banks provide safe storage and records of withdrawals, deposits, and direct payments they have authorized. 5. Economies of scope & scale: Intermediaries help create efficient markets and lower the cost of doing business. offer the benefit of pooling risk, reducing cost, and providing economies of scale, among others.