Social Sciences and History / Unit 14 SSH 1327 short lesson, about 20 seconds
Four Functions of Money; Commodity and Fiat
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The idea
Without money people barter, needing a double coincidence of wants. Money serves four functions: medium of exchange, unit of account, store of value, and standard of deferred payment. Commodity money has value from another use; fiat money has no intrinsic value but is declared legal tender.
In practice
Gold coins against paper dollars.
Where people slip
Commodity-backed currency is paper redeemable in the commodity.
Your place on the trail
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