MMW Chapter 1 Bonifacio

TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES
(MANILA)
GEC 004B- MATHEMATICS IN THE

MODERN WORLD
BAFM12S1
GROUP WORK #1
CHAPTER 1 – THE HISTORY OF MONEY : FROM BARTER TO
BANK NOTES
Instructor: Patriot Bonifacio

Gerardo Abadilla, CHE, Bonto, Kenneth
Canjeo, Andrea
January 31, 2022 Cardoza, Elaine
Cerrado, Ritz Jericho
Constantino, Abigail
Crisologo, Jensen
Honor Pledge
“I accept responsibility for
my role in ensuring the
integrity of the work
submitted by the group in
which I participated.”
Remarks
Bonto, Kenneth Cerrado, Ritz Jericho
We are the Patriot Bonifacio, we It was great experience to be part of this
discussed about the world of finance collaborative work.
specifically the history of money and its
significance to the people and to the Constantino, Abigail
economy. It is really very interesting We are a group of six called Bonifacio, and
money especially if you are into financial our professors have assigned us an
or business subjects, you will learn about assignment to do this semester. My
its etymology of trade and barter and the classmates' conversation was, as I said,
history of currency and its functions. It is fun and good since everyone offered their
very significant nowadays to study about thoughts and opinions on the topic, and we
currency market and how it actually affects all contributed our highly amusing behavior
the human lives it also linked in some to make the discussion more interesting
topics such as how does political system and enjoyable. Self-learning is helpful and
shaped the monetary system. enjoyable as an individual, but studying
alongside your classmates is on a new
Canjeo, Andrea
level. The relationship you build with them
I have thoroughly enjoyed our group is more convenient and unforgettable. It's
discussion and, I'm very grateful that all simpler to absorb all of the teachings when
members participate and contribute to the you're with them, and you can't help but
exercises. Each of us answers all the love the moments you spend with them.
questions by giving ideas/thoughts about
the topic. I also learned a lot about the Crisologo, Jensen
Basic Concepts of Money because of this All I can say is that this is good for us
group discussion. students, especially since we are an online
class and we don't have physical contact
Cardoza, Elaine
with each other but still we work out
Collaborative work is really challenging but together on how to find a way and how can
I’m glad that me and my groupmates was we give each other's thoughts and
able to do and finish our tasks opinions.
successfully. I am thankful to all my
groupmates for being considerate and
understanding at all time. In this group
work, we helped and guided each other
which made the work easier to do.
Exercise 1-1
1. To say money is socially defined means that _________
Money is a commodity that is widely acknowledged as a means of economic exchange. Also, whatever
performs the functions of money extremely well is considered to be money.
2. Functions of money?
Medium of exchange - what people trade for goods/services
Unit of account - measure that prices are quoted
Store of value - means for holding wealth
3. Meaning of money as a unit of account.
Money is used to compare the worth of different items and services. It is one of the methods used to
determine the value of a transaction in the economy.
4. Meaning of money as a store of value.
Money is a type of financial asset that may be utilized to save money. If you choose to save money
rather than spend it, the money retains its worth.
5. Meaning of money as a medium of exchange.
Money is a financial system that functions in an economy as a widely recognized medium of exchange
for transactional purposes. Also, Money as a means of trade gives us more flexibility. Increased
economic productivity supports an increase in total negotiation activity.
6. Price tag is an example of what function of money?
A price tag is an example of a unit of account because every item at a mall has a price tag attached to
it. So that we may simply compare the prices of various things.
7. Stock market price is an example of what function of money?

A stock market price is an example of a store of value because a lot of investors buy and sell in the
hopes of earning money or seeing their investment grows in value.
8. Check as payment exemplifies what function of money?
Check as payment is an example of a medium of exchange. Check may also be used as a method of
payment, particularly when a big sum of money is involved.
9. When economists say that money serves as a medium of exchange, they mean that it is a type of
money that's commonly accepted as a means of exchanging goods and services. It is widely understood
that you may trade your money for something else in the market, such as things and services that you
want to buy but can't because you don't have enough money.
10. When economists say that money serves as a unit of account, they mean that it indicates that a
product's or service's worth is expressed or quoted in a single unit of measurement, usually the
country's currency. The unit of account is therefore used to assess and evaluate the relative worth of
products and services.
11. When economists say that money serves as a store of value, they mean that it is when
economists say money functions as a store of value, they're referring to the fact that it can be used to
purchase goods; it's a way of storing wealth in a spendable form for future use or a way to keep wealth
in a readily spendable form for future use
12. Fiat money is _____________
Fiat money is a currency that the government has declared to be legal currency. Fiat money has no
intrinsic or practical value. It only has value if a government backs it or if the parties to a trade
agreement on it.
13. Relationship of the purchasing power of the Peso to the price level?
The connection between the price level and the amount of goods produced is inverse. Money's
purchasing power (all other variables being equal) The higher the price level, the better. The lesser
money's purchasing power, the less it can purchase (all other things being equal). As the price level
rises, things become more expensive.
14. The money supply is backed by ___________
The money supply is backed: by the government's ability to control the supply of money and therefore
to keep its value relatively stable.
15. Checkable deposits are classified as money because they can be readily used in purchasing goods
and paying debts.
16. The value of money relationship with the price level is _____________
The value of money falls as the price level rises, which is the underlying causal relationship between
the price level and the value of money. The price level is the average of all product and service prices in
a given economy, whereas the value of money is the amount of money that can be purchased with one
unit of money. Inverse in wherein they are correlated with each other. One example of it is if the price
level increases the value of money goes down and vice versa.
17. The purchasing power of money and the price level vary inversely.
18. If the price index rises from 100 to 120, the purchasing power value of the Peso will fall by one-
sixth.
19. Other things equal, an excessive increase in the money supply, will affect the purchasing power
of the Peso in what way?
Changes in Price Due To Inflation and Deflation
20. The transactions' demand for money is most closely related to what function of money?
Medium of exchange
21. The asset demand for money is most closely related to what function of money?
Store of value
22. The asset demand for money relationship with the rate of interest is the asset demand for money
is inversely related to the market interest rate. This is because at a lower interest rate, more people
will expect a rise in the interest rate (and thus a fall in aftermarket bond prices).
Exercise 1-2
True or False
1. Balance of payments could be one of the reasons for the adverse economic condition?
True
2. Money can be in any form, material, or appearance under "medium of exchange

concept/principle.
True
3. Our tie with the U.S. is one that could partially explain our present monetary system including its
good and bad effects.
True
4. Political system is one of the key elements that shaped our monetary system.
True
5. The lesser the currency exchange rate of the country to the dollar, the less progressive the country
would be.
True
Define
6. Money - is basically a type of tangible asset and a medium of exchange and a store of value that
enables us to trade or to barter a common measure of the value of goods and services being
exchanged.
7. Portability - in the world of finance portability means how money or currency travels from one
country to another. Boulders and heavy gold that cannot be transported easily from one place to
another will be represented by paper bills and coins that are easy to handle and transported.
8. Unit of account - a nominal monetary measure or currency used to value the goods and services,
liabilities, assets, revenues, expenses. It is one of the three functions of money. In other words, the unit
of accounts is a measurement for value.
9. Durability - Money should be in the form of any durable material to make sure it can be used for a
long period of time. In early times silver, bronze, gold and other metallic materials were used as a form
of currency.
10. Store of value - money is a means of storing wealth. It preserves its value over time, while inflation
may cause part of its purchasing power to dwindle. Individuals may prefer to save their money for later
use rather than exchange it for other types of products or assets today.
11. Medium of exchange - is an instrument or a system used for facilitating products, sales, purchases
between parties, and it represents the current value of a currency in economies.
12. Bartering - is an old form of commerce by exchanging goods of equivalent value between 2 or
more parties without the use of money.
Enumerate the functions of money
13. Money as measure of value
14. Money as medium of exchange

15. Money as a store of value
16. Money as means of payment
Enumerate the necessary attributes of money
17. Acceptability
18. Portability
19. Durability
20. Divisibility
21. Limited Supply
22. Malleability
23. Uniformity
24. Stability

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TECHNOLOGICAL INSTITUTE OF THE PHILIPPINES

GEC 004B- MATHEMATICS IN THE

Instructor: Patriot Bonifacio

Medium of exchange - what people trade for goods/services

Unit of account - measure that prices are quoted

Store of value - means for holding wealth

3. Meaning of money as a unit of account.

4. Meaning of money as a store of value.

5. Meaning of money as a medium of exchange.

6. Price tag is an example of what function of money?

7. Stock market price is an example of what function of money?

8. Check as payment exemplifies what function of money?

12. Fiat money is _____________

14. The money supply is backed by ___________

Changes in Price Due To Inflation and Deflation

2. Money can be in any form, material, or appearance under "medium of exchange

Enumerate the functions of money

13. Money as measure of value

14. Money as medium of exchange

16. Money as means of payment

Enumerate the necessary attributes of money

21. Limited Supply

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