Task 1 - Money, Foreign Exchange, Finance

 

1.     How are money and currency defined?

As a form of money in societies, they provide to the people official notes that promised payment for a product or service, as well as represents a container to store our economic energy.

2.      What are the differences between currency and money?

Currency	Money
It is a medium of exchange, a unit of account. It is portable, durable, divisible and something called fungible (each unit is the same as the next unit, each dollar values the same in the everyone’s pocket).   When monetary events like: inflation, deflation happened, the wealth and the currency can be dilute.   National currencies are really a tool used by the government and the financial sector.	It is all of those things plus a store of value over a long period of time. Properties: Easy medium of exchange Unit of account Durable Divisible Portable Fungible It is limited in quantify   It is a store of value and maintain its purchasing power over longs periods of time.

 

3.      What are their most important characteristics?

They are portable, durable, divisible and fungible.

4.      What is a Fiat currency?

It is a currency that exists at the dictate or by fiat from the government.

When they print the bills, the give them the fiat designation which then makes the currency official.

 

5.      What are its characteristics?

Fiat currencies are bases solely on confidence and always return to their intrinsic value of zero.

Each country have a define bill or coin, in this is said for the government, people need to accept it, that is the reason why we use certain money.  

6.      What is money and currency used for?

 For example, in Egypt, they used the same gold and silver, even if they do not notice the ‘importance’ or the significant that these elements provide to the society until now. Another example is salt.

7.      What does “store of value” refer to?

When something can be used to exchange services or products because it values, this it is dictated for the rest of the society. But the video mentions that silver and gold are the principal and ultimate store of value, these have been existed over thousand and years, nowadays the have the same or even more value.

8.      What was the currency used in the past?

For example, in Egypt, they used the same gold and silver, even if they do not notice the ‘importance’ or the significant that these elements provide to the society until now.

9.      What is the most beautiful way of money?

When it is permanent, it is a store of value and a unit account. But this money does not go away and it cannot be increased --- I am talking about: gold.

10.  What is a “solving system”?

When it is under control.

11What happens when governments expand the currency supplies?

Inflation: the prices will rise, if you expand the currency supply, prices have to rise to suck up the excess currency. 

12 What is barter?

The beginning of ‘currency’, this happens when you exchange three coconuts for four fish.

Over the time, this action was more difficult to do, so people invented money, something which is divisible and a portable medium of exchange.

 

13 What is Quantity of Easy?

It is a term for currency creation, actually, this increases currency.

 

14 What is the tendency of QEs around the world?

Massive, it is a global phenomenon, QEs crash the world economy.

 

Write a final reflection on the topic, mentioning what were the most important aspects you learned.

Money is the principal instrument of the economy of each country and the world. With it, we can buy a product or a service, but money has a extend history, an incredible background. We can use different materials like: gold, silver, even in the past, people used seashells, now we accept the fiat currency, which is a way of the government manages the economy, these actions have to be under control ‘in a solving system’, because if it is not in this way, we can live monetary events like: inflation or deflation, affecting the currency, the purchasing power or why not, our freedom and time.