COPYRIGHTED MATERIAL
LET'S PRACTICE
Name: _____________________________________________________________________________ Classybucks Conundrum Money can be almost any thing , but it must provide some specific functions : (1) it must be commonly accepted as the medium of exchange ; (2) it must provide a unit of account ; and (3) it must be capable of being saved so people can accumulate wealth. If the thing used as a medium of exchange lacks any key function, it’s not money. There are also many characteristics of money . A medium of exchange may lack some characteristics, yet still qualify as money. You are an expert in the process or system by which goods and services are produced, sold, and bought. (That’s right, you’re an economist .) You have been invited to Classtopia to examine and analyze Classybucks to determine whether they meet the specific functions of money. Reread Barter’s a Bust at U.B. Smart School and answer the following questions. 1. Are Classybucks the medium of exchange commonly accepted by Classtopians to purchase goods or services? How can you tell? Is a commonly accepted medium of exchange a function or a characteristic of money? _ ______________________________________________________________________________ _ ______________________________________________________________________________ _ ______________________________________________________________________________ 2. Do Classybucks provide a common measure of value ? How can you tell? Is a common measure of value a function or a characteristic of money? _ ______________________________________________________________________________ _ ______________________________________________________________________________ _ ______________________________________________________________________________ 3. Do Classybucks allow for a store of value so they can be accumulated for future use? How can you tell? Is store of value a function or a characteristic of money? _ ______________________________________________________________________________ _ ______________________________________________________________________________ _ ______________________________________________________________________________ 4. Durability. Are Classybucks durable? How can you tell? Is durability a function or a characteristic of money? _ ______________________________________________________________________________ _ ______________________________________________________________________________ _ ______________________________________________________________________________ Yes. The Classtopians all agreed to use paperclips as their medium of exchange , so they are commonly accepted as the Classtopia medium of exchange . A commonly accepted medium of exchange is a function of money. Yes. They have a stated value defined by their red, green or yellow color. A common measure of value is a function of money. Yes. Classybucks can be accumulated for future use . We know this because calculator kid saved his Classybucks and bought a calculator. Another student saved enough for tutoring, etc. Store of value is a function of meny. Yes. Paperclips are relatively durable . In that they do not decompose , deteriorate or degrade much over time . Durability is a characteristic of money. PRODUCT PREVIEW
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Lesson 3 | Show Me the Medium of Exchange
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