21.6.3 The importance of money and finance A first step in both consumer and financial literacy is understanding money and its purpose in our lives.
FIGURE2 While the use of ‘physical’ currency is declining, money is hugely important in our lives.
The functions of money Money performs four very important functions in our market system:
SkillBuilder discussion Investigating 1. Do you carry physical money, i.e. notes and coins? If so what do you use it for? 2. What do you know about
Medium of exchange — Allows exchange of goods and services using accepted currency.
‘credit’? Can you explain to a partner how it works?
Measure of value — Prices reflect worth of goods and services.
Store of value — Enables saving for future spending.
Money
Standard of deferred payments — Facilitates buying on credit with known future payments.
618 Jacaranda Humanities Alive 8 Victorian Curriculum Third Edition
Made with FlippingBook interactive PDF creator