Glossary Terms:

Why do we need money? Think about Ebay!

Glossary terms from:
http://www.econedlink.org/e629


Barter

Trading a good or service directly for another good or service, without using money or credit.

Characteristics of Money

Characteristics of money include it being durable (both physically and socially), divisible (money can be divided into increments appropriate for the cost of an item), transportable (literally meaning that money must be easy to move), and the ability to regulate the amount of money in a market by making it uncounterfeitable.

Currency

The money in circulation in any country.

Exchange

Trading a good or service for another good or service, or for money.

Exchange Rate

The price of one nation's currency in terms of another nation's currency.

Functions of Money

Money functions as a medium of exchange, a store of value, and also a unit of account.

Goods

Tangible objects that satisfy economic wants.

Interest

Money paid regularly, at a particular rate, for the use of borrowed money.

Markets

Places, institutions or technological arrangements where or by means of which goods or services are exchanged. Also, the set of all sale and purchase transactions that affect the price of some good or service.

Money

Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.

Product

A good or service that can be used to satisfy a want.

Purchases

In a credit arrangement, the total amount spent during the billing cycle.

Purchasing Power

The amount of goods and services that a monetary unit of income can buy.

Return

Earnings from an investment, usually expressed as an annual percentage.

Sale

An exchange of goods or services for money.

Services

Activities performed by people, firms or government agencies to satisfy economic wants.

Trade

The exchange of goods and services for money or other goods and services.

Wants

Desires that can be satisfied by consuming or using a good or service. Economists do not differentiate between wants and needs.

Work

Effort applied to achieve a purpose or result, often for pay; skills and knowledge put to use to get something done; employment at a job or in a position; occupation, profession, business, trade, craft, etc.