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Edexcel International AS Economics UNIT 1 – Markets in Action Functions of Money UNIT 1 – Markets in Action | Section 1 – The nature of economics The history of money • Journey to plastic: A history of money in five objects • http://www.bbc.com/news/business36056401 • Examples of money from 9000 B.C. In China, Africa and India UNIT 1 – Markets in Action | Section 1 – The nature of economics The barter economy • What is bartering? • Exchange one good or service for another • For example – a pig for ten chickens • But you need to find some who wants what you have and vice versa – double coincidence of wants UNIT 1 – Markets in Action | Section 1 – The nature of economics Functions of money Medium of exchange • must be acceptable to the buyer and the seller. Store of value • need to be able to use the money in future transactions. UNIT 1 – Markets in Action | Section 1 – The nature of economics Functions of money Unit of account • Allow the value of goods and services to be measured and compared. Standard of deferred payment • Payment that is made in the future – the monetary value is agreed before the payment is made. UNIT 1 – Markets in Action | Section 1 – The nature of economics