Money, Foreign Exchange and Finance

Activity #3 Watch the videos included in this assignment, and complete the activities

1. How are money and currency defined?

Money is medium of exchange in an economy that is used to facilitate transactional trade and currency is a system of money in general use in a particular country

2. What are the differences between currency and money?

The currency is a means of transaction, an accounting unit, it is portable, durable, divisible and something called fungible. Money is all things, plus a repository of value for a long time.

3. What are their most important characteristics?

Universal value, Its value depends on supply and demand and Its value is opposite to the price of the products

4. What is a Fiat currency?

The Fiat currency is trust-based currencies that exist at the disposal of a government with no other support than faith in it.

5. What are its characteristics?

this coin is created from nothing itself, that has no backing, that does not have any kind of value.

6. What is money and currency used for?

 Medium of exchange

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

Is an asset that maintains its value, rather than depreciating.

8. What was the currency used in the past?

The currency that people used was gold and silver

9. What is the most beautiful way of money?

By trade

10. What is a “solving system”?

It is a system implemented to stabilize the currency and prevent its devaluation

11. What happens when governments expand the currency supplies?

Would cause your currency depreciation

12. What is barter?

Is exchange of goods or services for other goods or services without using money.

13. What is Quantity of Easy?

That was created by governments for giving currency out of thin air to the banks.

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

The increase in prices due to the increase in the value of currencies

Write a final reflection on the topic, mentioning what were the most important aspects you learned.

In conclusion, it is important to highlight the difference between money and currency because currency is a means of transaction, an accounting unit, it is portable, durable, divisible and something is fungible, but money is everything, plus a store of value for a long time.

A new term that I learn is "Fiat currency" this is currency is trust-based only that exist with no other support than faith in it. They also mention several cases in which the currency has had depreciation over the years and the importance of the value of gold and silver.