Instructions: The student will complete 2 Discussions in this course. The student will post one thread of at
least 300 words by 11:59 p.m. (ET) on Thursday of the assigned Module: Week. The student
must then post 2 replies of at least 100 words by 11:59 p.m. (ET) on Monday of the assigned
Module/Week. For each thread, students must support their assertions with at least 3 scholarly
citations in APA format. Each reply must incorporate at least 1 scholarly citation in APA format.
Any sources cited must have been published within the last five years. Acceptable sources
include newspapers, periodicals, journals, textbooks, credible news websites (NPR, BBC, etc.),
and the Bible. Sources such as Wikipedia, About.com, thebalance.com, book reviews, and blogs
are prohibited.
DB #1
What is money and how is it used? Money consists of currency (coins and paper bills) and any other forms of generally accepted payment for goods. Money has three primary functions. (Coppock & Mateer, 2021) The first function that money serves as, is as a medium of exchange. When money is transferred for goods or services, it serves the purpose of a medium of exchange. This eliminates the need for a bartering system. As a medium of exchange, it can be a commodity, commodity-backed, or fiat money. (Coppock & Mateer, 2021) An example of a commodity is gold or silver and commodity-backed money consists of dollars backed by gold or silver. The owner of a commodity-backed bill could exchange that bill for the represented amount in gold. Fiat money is money with no value other than as a medium of exchange. (Coppock & Mateer, 2021)
The second purpose is that money serves as a unit of account. A unit of account is, “unit that things are priced in within a society.” A unit of account enables a society to speak a common language. (Team, 2022) When purchasing a pizza for $5.00 the cashier is communicating the value of a Hot-N-Ready so that you can understand. Utilizing a unit of account to express value allows people to make accurate comparisons about items. (Coppock & Mateer, 2021) The last purpose that money serves is a store of value. A store of value is a means for holding wealth. Imagine if you were paid a week’s wages in bananas. This would not be a good means of storing value, impart because the value of the bananas would diminish rapidly as they spoil. The use of currency to store value has been used since the Middle Ages, and as investing has evolved this function has slowly diminished. (Coppock & Mateer, 2021)
Bartering is an ancient system that consists of trading goods or services one person possesses for goods or services another person has. The existence of bartering, and its downfall, is based on the occurrence of a double coincidence of wants. Double coincidence of wants occurs when parties in need of goods happen to have what each other needs. Double coincidence of wants is a rare occurrence in life. Bartering fails to fulfill the three main purposes of money. Bartering does not provide a medium, establish a unit of account, or a store of value. (Coppock & Mateer, 2021)
Throughout time there have been several different forms of money used throughout the world. Evolving from leather coin and wampum to digital and virtual money. One forgotten form of currency is spade money. Spade money was an early form of coin commodity from China. This commodity was used during the Zhou Dynasty. The oldest coin minting site known, dates to 640 BCE and was used to mint spade coinage. (Beattie, 2022)
What does the Bible have to say about money? According to Nance-Nash “Money and possessions are the second most referenced topic in the Bible – money is mentioned more than 800 times – and the message is clear: Nowhere in Scripture is debt viewed in a positive way.” (Nance-Nash, 2012) Throughout my journey in managing money as an adult I have had to learn many lessons the hard way. Many of these lessons stemmed from the use of debt, which I no longer use. The Bible says, “The rich rule over the poor, and the borrower is slave to the lender.” (Nance-Nash, 2021) I believe this verse to be very clear on God’s stance on debt, and over the last six years, my family has worked to align our practices with His guidance.
References
Beattie, A. (2022, April 14). The history of money: From bartering to banknotes to Bitcoin. Investopedia. Retrieved April 26, 2022, from https://www.investopedia.com/articles/07/roots_of_money.asp
Coppock, L., & Mateer, D. (2021). Principles of Macroeconomics Covid 19 update (3rd ed.). Norton.
International Bible Society. (1997). The holy bible, New International Version: Containing the Old Testament and the new testament.
Team, T. I. (2022, March 28). Money definition. Investopedia. Retrieved April 26, 2022, from https://www.investopedia.com/terms/m/money.asp
DB#2
The concept of money is something that seems simple, but there are so many different areas and sides to it. Money itself is defined in the textbook as any generally accepted means of payment. This means that when something is paid for, it is paid for with money. Money is known by many to have three basic functions. These include being a store of value, medium of exchange and unit of account. These three things are intertwined in our everyday lives more than we give attention to. Currency gives us an item to exchange in order to meet these three functions in our day to day lives.
Bartering is not as common in our society as it once was, or as it is in other cultures. According to Investopedia, the act of bartering happens when goods or services are traded between two individuals. This happens excluding the actual use of money, but the two parties are still receiving either a good or a service. Therefore, bartering does not meet all of the functions of money as it does not actually include a medium of exchange. An example from the same source, Investopedia, is a farmer who is having a fence being built for him and he pays the builder the worth of the fence in form of crops and foods. This person is not actually paying money, but something that is worth money to him, so this is why it is considered “bartering”.
A verse in scripture that I have always found challenging is Hebrews 13:5 (NIV). It states “Keep your lives free from the love of money and be content with what you have because God has said, “Never will I leave you, never will I forsake you”. ” This verse is especially challenging to me as living in the country we do is not always the easiest to avoid materialism. We must remember however, as followers of Christ, we have all that we need in Him. He will always provide, we just have to trust Him.
Coppock, L., & Mateer, G. D. (2021). Principles of Macroeconomics. W.W. Norton.
Holy Bible, New International Version®, NIV® Copyright ©1973, 1978, 1984, 2011 by Biblica, Inc.
Federal Reserve Bank of St. Louis. (2021, May 6). Functions of money – the economic lowdown podcast series. Saint Louis Fed Eagle. Retrieved April 28, 2022, from https://www.stlouisfed.org/education/economic-lowdown-podcast-series/episode-9-functions-of-money#:~:text=To%20summarize%2C%20money%20has%20taken,%22backed%22%20by%20a%20commodity.