5. History of Money
Bartering &
Exchange
Shells (1200
B.C.)
Metals(1000
B.C.)
Paper
Money
(1000
A.D.)
Coins (600 B.C.)
Bankin
g in
Europe
(1400
A.D.)Wampum
(1637)
The Gold
Standard
(1816)
Credit Card
(1950)
Plastic Money
(1990s)
Google Wallet &
Clear Exchange
(2011)
6. What is money?
Money is a good that acts as a medium of exchange in transactions. It is a
way for a person to trade what he has for what he wants.
7. Barter System
A barter system is an old method of exchange. The is system has been
used for centuries and long before money was invented. People
exchanged services and goods for other services and goods in return.
8. Shells
Coastal regions around the Indian Ocean saw the use of cowrie shells in
trade as early as 1200BC
Became the first medium of
exchange.
Shells prototype of money.
For the reason that barter was
unfair to extent.
9. Coinage
• After the use of shell the first mental
money was developed and introduce.
• Those coins had holes in the middle, so
they could easily carry around their
neck.
• They were imprinted with the faces of
emperors and gods to show the value.
• Such as sliver, bronze, gold.
10. Leather
• In 118BC, banknotes in the form of
leather money were used in China
• They were made out of deer skin
• leather was used as banknotes.
11. Paper money
• The first known paper banknotes
appeared in China in 9th century
• The travels of Marco Polo to China
introduced the idea of paper money
to Europe
• Paper money was developed after all the
other medium of exchanged where
introduced one after the other.
• Up to this day notes (paper money) is
used as evidence of ability to pay.
13. Commodity Money
Commodity Money The most primitive
type of money is commodity money.
Some useful commodity that is in general
demand is used as an exchange medium
and may serve both as a means of
payment and a measure of value.
Ex: tea, sugar, shells, tobacco etc.
14. Metallic Money
Throughout history, various metals, some of which are considered
precious today, appear to have been used as a form of currency. The
Bretton Woods system, under which all major currencies were
theoretically exchangeable for gold, was abolished in 1971.
15. Paper Money
• A country's official, paper currency that is circulated for transaction-related
purposes. The printing of paper money is typically regulated by a country's
central bank in order to keep the flow of money in line with monetary policy.
16. Bank credit
A demand deposit or bank money refers
to the funds held in demand deposit
accounts in commercial banks. These
account balances are usually considered
money and form the greater part of the
money supply of a country.
17. Electronic Money
• The money stored in certain electronic
cash cards.
• Transactions are made electronically.
• Examples are Credit Card, Debit card,
Charge card etc.
18. Functions of money
Medium of exchange
Unit of value
Standard of differed payments
Store of value
Basis of the credit system
Equalizer of marginal utilities and productivities
19. Features of Money
1. Money should be durable, it should not get easily decomposed or
degraded.
2. Money should be handy, easily transportable.
3. Accepted – People are willing to accept
4. Divisible – it can be divided into smaller parts
5. Stable in value – The value of Money dose fluctuate, but overall it
remains stable.
6. Limited supply – Supply must be scarce
