ECON 272

In Class Exercise Five - Money

1.  Who invented money?

2.  What is money?

3.  What does it mean to barter?

4.  What does double coincidence of wants mean and why does it cause a problem for bartering?

5.  What are the three functions of money?

6.  What is commodity money? (Make sure you can explain the process of its SPONTANEOUS emergence).  Assume there is no money (dollars, cents) in this classroom.  What do you think might emerge as commodity money in this class (society)? Why?

7.  What are the characteristics of a "good" commodity money?

8.  What is debasement?  Explain the process?

9.  What is fiat money?

   a.  backed?

   b.  partially backed?

   c.  non-backed?