3. Money, Foreign Exchange, Finance

 3-Task 1 Money, Foreign Exchange, Finance.

 

Name: Daniel Chavez Martinez 

Nua: 116955

 

·       Watch the video, answer the following questions.

 

1.     How are money and currency defined?

Currency: Is a medium of exchange, a unit of account. It is portable, durable, divisible and fungible.

Money: It has the same meaning of currency but this one stores a value over a long period of time.

2.     What are the differences between currency and money?

Money which cannot be touched, neither it can be smelled; however, money can be seen in terms of the numbers.

              Currency is the promissory note or coin which is presented in the form of money

 

3.     What are their most important characteristics?

·       Medium of exchange 

·       Store of value 

·       Unit of account 

        

4.     What is a Fiat currency?

Is a currency that exist by the government they print it, they give it the fiat designation which that makes the currency official. (Fiat: An authoritative order or official decree) But it is only paper.

5.     What are its characteristics?

They are durability, portability, divisibility, uniformity, limited supply, and acceptability.

 

6.      What is money and currency used for?

To exchange goods and services.

 

7.     What does “store of value” refer to?

A store of value is any commodity or asset that would normally retain purchasing power into the future and is the function of the asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved. 

 

8.     What was the currency used in the past?

The first form of currency was the cowry shells in 1200 BC

 

9.      What is the most beautiful way of money?

The most beautiful way of money is gold because it cannot be printed and it doesn’t loses its value very easy.

 

10.  What is a “solving system”?

Constrain governments ability to spend beyond its means

 

11.  What happens when governments expand the currency supplies?

The inflation rate will go higher.

 

12.  What is barter?

Exchange (goods or services) for other goods or services without using money.

 

13.   What is Quantity of Easy?

It is a currency created out of thin air and given to the banks who paid themselves record bonuses in reward for crashing the world economy 

 

14.  What is the tendency of QEs around the world?

It is continuously increasing and expanding their currency supplies.

 

·       Write a final reflection on the topic, mentioning what were the most important

 

These videos had a positive impact in me, they are really interesting. It is important to remind ourselves that money is only a piece of paper and its losing its value throughout time. We have to do something with it fast and transform or invest it as quick as posible before is too late. It also convinced me to start buying and investing on gold for future times.