Understanding the Functions of Money

The video explores the concept of money, its functions, and its evolution from commodity to fiat currency. It explains the three main functions of money: store of value, unit of account, and medium of exchange. The video also discusses the characteristics that define money, such as durability, portability, divisibility, uniformity, limited supply, and acceptability. The presenter concludes with a preview of a follow-up video comparing these characteristics to Bitcoin and gold.

What is the primary purpose of money according to the introduction?

• To be a form of entertainment

• To be a collectible item

• To act as a medium of exchange

• To serve as a piece of art

Which of the following is NOT a function of money?

• Medium of exchange

• Source of happiness

• Unit of account

• Store of value

Why is money considered a 'store of value'?

• It can be eaten

• It is always increasing in value

• It retains value over time

• It can be used to decorate homes

What does 'unit of account' mean in the context of money?

• It is a unit of length

• It is a unit of weight

• It measures the value of goods and services

• It is a unit of temperature

What type of money was used before fiat money?

• Cryptocurrency

• Representative money

• Digital money

• Virtual money

What does 'fiat money' rely on for its value?

• The weight of the currency

• The intrinsic value of the material

• The color of the currency

• The trust in the government

Which characteristic of money ensures it can be easily carried?

• Divisibility

• Portability

• Durability

• Uniformity

Why is 'limited supply' an important characteristic of money?

• To ensure it is always available

• To prevent inflation

• To make it heavy

• To make it colorful

What does 'acceptability' mean in terms of money?

• It is accepted by everyone as a form of payment

• It is accepted as a form of decoration

• It is accepted as a form of art

• It is accepted as a form of entertainment

What will the next video compare fiat currency to?

• Art and music

• Bitcoin and gold

• Cars and houses

• Books and movies